Financial Leverage
To: Jack Smith From: Martin O’Connor Date: 11/13/2003 Re: Financial Leverage Recently Comco has been considering using financial leverage by borrowing money at an interest rate of 10% and hoping to increase our return on investment. ... There are certainly risks involved with financial leverage and this undertaking may not develop into the profitable venture that we desire. ... We have been faced with the prospect of using financial leverage by having a long-term debt cost of 10% with an expected ROI of 12%.