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2 Use the following information and illustrate the concept of positive financial leverage. Explain the principle in detail. A B C D Average total capital

image text in transcribed 2 Use the following information and illustrate the concept of positive financial leverage. Explain the principle in detail. A B C D Average total capital 3 500 000 3 500 000 3 500 000 3 500 000 Debt Ratio 30% 50% 75% Farm rate of return 20% 20% 20% 20% Cost of loan capital 15% 15% 15% 15% (15)

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