Optimum Leverage Ratio
(redirected from Optimum Leverage Ratios)Optimum Leverage Ratio
The borrowing level that maximizes the value of the firm. The cost of capital to the firm is minimized at that same level.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Optimum Leverage Ratio
The debt-asset ratio that allows a company to achieve the highest possible return without taking on excessive risk. The optimum leverage ratio minimizes the cost of capital without acquiring a high possibility of default.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved