The financial leverage and financing cost are considered as an
important phenomenon especially with their effect on Return on
Investment (ROI) and this study aims to analyze this relationship in
corporations in Palestine within the period between 1999 and 2003, by
taking a selected (15) corporations as a sample.
The descriptive methodology has used to analyze the financial
statements of sample of this study.
The study has revealed the following results:
1. There is negative relationship between the cost of dept and
the return on investment (ROI).
2. There is negative relationship between dependency on the
financing sources and the cost of these sources.
3. There is no significant relationship between financial
leverage and the return on investment (ROI)
And the study suggested increasing the finance by equity, and on
other hand decreasing the finance by debts as could as possible the
taking into consideration the risk degree.