DQ 1SD and KW DQ2 Responses W10 Essay Example | Topics and Well Written Essays - 250 words

DQ 1SD and KW DQ2 Responses W10 - Essay ExampleI agree with you that the use of leverage is preferential for the person holding the leverage. Leverage can also be used by individual investors in the stock market to increase their purchasing power through the use of a margin cover (Sec, 2009).When companies are able to reduce taxes and depreciation as they use leverage firms gain an advantage that allows them to come through better operating results. For example two companies piddle the same pretax income. One firm uses leverage and has kindle tax deductions, while the second company does not use leverage. The company that uses leverage will have a higher net income due to lower taxes. As you mentioned in your response leverage is frequently used by corporations in order to achieve growth. Successful multinational corporations such as McDonalds and Starbucks would not have been able to achieve their tremendous level of growth and success without the use of leverage. I agree with you that the value of a project is highly dependent on the present value of the currency flows the project is supposed to generate during its