The Higher the Degree of Operating Leverage, the More the Danger

question 319

True/False

The higher the degree of operating leverage, the more the danger from forecasting risk.

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Definitions:

Financial Risk

The equity risk that comes from the financial policy (i.e., capital structure) of the firm.

Prices

The amount of money required to purchase goods or services.

Rate Of Change

The speed at which a variable quantity, such as a number or measurement, changes over a certain period of time.

Sheet Steel

A type of steel that has been rolled into sheets; commonly used in manufacturing and construction industries.