Apart from higher risk exposure, the investors would find the personal leverage. This is so because with corporate leverage the formalities and procedures involved in borrowing are to be observed by the firms while these will be the responsibility of the investor borrower in case of personal leverage. That corporate borrowing is more convenient to the investor means, in other words that investors would prefer them rather than to do the job themselves. The perfect substitutability of the two types of leverage is, thus, open to question.

reCAPTCHA is required.

Share This