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Faith, America
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Characteristics of High Leveraged Industries
A highly geared industry will typically face high debt...
I wonder, are there any other characteristics of such sectors?
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Elena Eretenko, United Kingdom
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Success or Debt is Up to You High leverage does not encourage "extremely large positions", but greed does. So, I think that success or debt is up to you — your choices, your actions, your behaviours and money management.
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Manoj Jayale
Manager, India
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Trade-off Theory of Capital Structure Before answering to this question, one has to look at trade-off theory of capital structure: There is marginal benefit up to the optimal level of debt, but beyond that, the company might go into bankruptcy and face the cost of that.
So one has to optimize the overall value while choosing the debt component in its financing.
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