Financial leverage puzzle – preliminary conclusions from literature review
Financial leverage puzzle – preliminary conclusions from literature review

Summary/Abstract: The paper reviews the way financial leverage concept is defined and used in books and research papers. More than 30 finance textbooks from Polish and foreign authors have been screened. In addition, over 100 finance and accounting papers recently published in the leading English finance and accounting journals have been analysed. Empirical research papers as well as the glossaries of textbooks tend to identify leverage with debt or indebtedness. In this approach, little attention is paid to the exact form of a capital structure ratio used. In addition, finance books debate leverage in many various chapters – every time viewing leverage differently. Single most surprising finding of the paper is a big difference between domestic and foreign attitude to DFL.

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