If a Firm Has a High Degree of Leverage Then

question 87

Multiple Choice

If a firm has a high degree of leverage then a small change in sales results in

• A) an unpredictable change in expected profits
• B) a very small change in expected profits
• C) no change in expected profits
• D) a large change in expected profits.

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Definitions:

Fraud

An intentional deception made for personal gain or to damage another individual.

Misrepresentation

A false statement of fact made by one party to another, which, while inducing that party to enter into a contract, leads to its breach.

Misleading Statement

False or deceptive information that can lead someone to an incorrect understanding or belief.

Expression of Opinion

The act of stating or sharing one's thoughts, beliefs, or judgements without the intention of stating a fact.