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Abstract

The past few years have seen the emergence of a distinct literature concerned with the pedagogy of finance. One area of particular interest is the effective teaching of the concept of financial leverage. This paper presents an overview of some considerations pertaining to the initial presentation of financial leverage to the undergraduate business student. The paper begins by providing a review of the most common teaching approaches as evidenced by prominent introductory finance textbooks. Next, an alternative streamlined initial presentation is discussed which can serve as an effective “hook” when the concept of financial leverage is presented.

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