Leveraged equity

Leveraged equity

Stock in a firm that relies on financial leverage. Holders of leveraged equity experience the benefits and costs of using debt.

Leveraged Equity

Stock in a publicly-traded company with a significant amount of debt. Leveraged equity carries the same risk as debt; that is, the company must service the debt to remain out of bankruptcy. On the other hand, leveraged equity can increase returns for shareholders when the cost of capital of debt is low.