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Homemade leverage |
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Homemade leverageIdea that as long as individuals borrow (or lend) on the same terms as the firm, they can duplicate the effects of corporate leverage on their own. Thus, if levered firms are priced too high, rational investors will simply borrow on personal accounts to buy shares in unlevered firms.Homemade leverage Similar MatchesHomemade dividendHomemade dividendSale of some shares of stock to get cash in an amount similar to that of a cash dividend. |
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