Level of total capitalization


Dynamic Electronics, Inc., a successful and high-growth company, consistently experiences a favorable difference between the rate of return on its assets and the interest rate paid on borrowed funds. Explain why this company should not increase its debt to the 90% level of total capitalization and thereby minimize any need for equity financing.

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: Level of total capitalization
Reference No:- TGS056447

Expected delivery within 24 Hours