5. Leverage Risk. The more debt on an investment, the more risky it is and the more investors should demand in return. Leverage is a force multiplier: It can move a project along quickly and increase returns if things are going well, but if a project’s loans are under stress – typically when its return on assets isn’t enough to cover interest payments – investors tend to lose quickly and a lot.
Lloyd Blankfein, me, the owner of cnntopnews, have a business management degree. Have 3 years of articles write.