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With Blank______, an investor is able to replicate a corporation's capital structure by borrowing funds and using those funds along with her own money to buy the company's stock.Multiple choice question.homemade leveragehomemade equitymortgaged propertyunlevered leverage

Question

With Blank______, an investor is able to replicate a corporation's capital structure by borrowing funds and using those funds along with her own money to buy the company's stock.Multiple choice question.homemade leveragehomemade equitymortgaged propertyunlevered leverage

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Solution

The correct answer is homemade leverage. This concept refers to the idea that individual investors can simulate the effects of corporate leverage (or capital structure) on their own. This is done by borrowing funds personally and using those funds to buy more of the company's stock. This way, the investor is able to create their own leverage, hence the term "homemade" leverage.

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