FINANCIAL LEVERAGE-THE INVESTOR'S PERSPECTIVE

One of the most important decisions in the financial management is the proper level of debt used in company's financing. Too much debt may cause doing business too risky, but on the other hand avoiding the debt makes the company's development slower. Usually higher level of debt means the better opportunities for growth of the company. The goal of this paper is to describe the relation between the financial leverage level used by the companies listed on Warsaw Stock Exchange and the rate of return gained by their investors. The impact of the debt level on the company's results, focused on financial liquidity and efficiency, is also taken into consideration to explain the investors' choices.