the ratio of a company’s loan capital (debt) to the value of its common stock (equity).
the use of credit or borrowed capital to increase the earning potential of stock.
verb
1. use of borrowed capital for (an investment), expecting the profits made to be greater than the interest payable.
“a leveraged takeover bid”
2. use (something) to maximum advantage.
“the organization needs to leverage its key resources”
Leverage is an investment strategy of using borrowed money—specifically, the use of various financial instruments or borrowed capital—to increase the potential return of an investment.