1. Positional advantage; effectiveness.
2. The use of credit or borrowed funds (such as buying on margin) to improve one’s speculative ability and to increase an investment’s rate of return.
3. The advantage obtained from using credit or borrowed funds rather than equity capital.
4. The ratio between a corporation’s debt and its equity capital.
— Also termed leverage ratio.
5. The effect of this ratio on common-stock prices.
leverage, vb.
1. To provide (a borrower or investor) with credit or funds to improve speculative ability and to seek a high rate of return.
2. To supplement (available capital) with credit or outside funds.
3. To fund (a company) with debt as well as shareholder equity.
4. Antitrust. To use power in one market to gain an unfair advantage in another market.
5. Insurance. To manipulate two coverages, as by an insurer’s withholding settlement of one claim to influence a claim arising under another source of coverage.
