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Some fast food restaurants have lease agreements

Author:
June 7th, 2024

A) Some fast food restaurants have lease agreements where their rental payment is a nominal amount plus a percentage of sales, rather than a fixed monthly amount. Discuss the effect of these lease agreements on the leverage and risk of the company.B) Financial companies traditionally have a large amount of debt on their balance sheets. Discuss briefly the effects of taking on debt on the overall risk of the company, and why they may be willing to take on debt.

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