Please answer and or respond to the following questions and or discussions. Please respond with informative information where other students and learn from the answers or responses. 1. Kevin and others, thanks for addressing the opening question this week by making value-added contributions that furthered our class discussion.Class, when might we use common-sized analysis? What value does it provide? 2, For those interested, locate a resource from the school’s library, the internet, YouTube or Vimeo. Choose a resource that covers one of the topics we are exploring in this module, Financial Leverage. Provide the hyperlink to the resource you located, and summarize what it illustrates in at least two sentences, or summarize what you learned after exploring the resource that you have chosen.3. The basics of financial leverage consist of assets and their returns coupled with how those assets are financed (The Finance Storyteller, 2019). Financial leverage that is beneficial to a company is the utilization of lower-cost debt financing to increase the return to shareholders (Wahlen et al., 2018). The return on common equity increases as organizations finance with low cost capital in addition to equity financing (Wahlen et al., 2018). When the ROCE exceeds the cost of capital it creates value for the shareholders (Wahlen et al., 2018). The company president that feels they can only take advantage of a small amount of financial leverage would be in a situation where they would have to rely more heavily on capital from investors, potentially because they do not qualify for capital from creditors. ReferenceThe Finance Storyteller. (2019, March 8). Financial Leverage Explained [Video]. YouTube. https://www.youtube.com/watch?v=GESzfA9odgEWahlen, James Michael, et al. Financial Reporting Statement Analysis, and Valuation: a Strategic Perspective. 9th ed., Cengage, 2018.
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