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4.7 DISADVANTAGES OF FINANCIAL LEVERAGE. The intuition behind the benefits of financial leverage… 1 answer below » 4.7 DISADVANTAGES OF FINANCIAL LEVERAGE. The intuition behind the benefits of financial leverage is that a firm can borrow funds that bear a certain inter- est rate but invest those funds in assets that generate returns in excess of that rate. Why would firms with high ROAs not keep leveraging up their firm by borrowing and investing the funds in profitable assets? Dec 08 2015 04:22 PM
