gearing
n.— «The managers have an incentive to take too much risk in order to deliver the excess return. One method is to borrow from the banks, in the expectation that the return on the new assets will be higher than the rate of interest owed to the banks. The borrowing—or the “gearing” as it is known technically—will then deliver the desired excess return.» —“ Capitalism will always cook up new products” by Tim Congdon Telegraph (United Kingdom) Aug. 29, 2007. (source: Double-Tongued Dictionary)
Further reading
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