Name the concept where using the debt along equity,higher return can be earn for equity shareholders.Under what condition it is possible?
Name the concept where using the debt along equity, higher return can be earn for equity shareholders. Under what condition it is possible?
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Trading on equity refers to an increase in earnings per share , I.e , dividend earned by the shareholders which is done b borrowing money(debt) at a lower cost. It can be done only when money can be borrowed cheaply,I.e ,when rate of interest on debt is lower than return on investment .
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