Which of the Following Statements Is Most Correct

question 113

Multiple Choice

Which of the following statements is most correct?

• A)The degree of combined leverage measures the sensitivity of earnings per share in EBIT.
• B)A firm's business risk is measured by its variability in earnings per share over time.
• C)A firm's degree of combined leverage is the product of its degree of operating leverage and its degree of financial leverage.
• D)All the above statements are false.

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Definitions:

Opportunity Cost

The cost of foregoing the next best alternative when making a decision or choice.

Ticket Price

The cost charged for admission to an event or access to a service.

Value Of Time

The economic worth assigned to time, reflecting what is foregone in engaging in a particular activity versus alternative uses.

Scarce Resources

Economic concept describing materials or services in limited availability relative to desired uses, necessitating allocation.