A Firm with High Operating Leverage Is Best Defined as a Firm

question 76

Multiple Choice

A firm with high operating leverage is best defined as a firm that has

• A)a high debt-to-equity ratio.
• B)high fixed costs relative to variable costs.
• C)a low,relatively stable beta.
• D)high variable costs relative to fixed costs.
• E)a high sales/assets ratio.

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Definitions:

Speed Dating

A matchmaking process where people meet potential partners for a brief time period, typically a few minutes, to see if there is mutual interest.

Well-Educated

Describes someone who has acquired extensive knowledge or learning through formal education or personal studies.

Attractive

Having qualities or features that arouse interest, desire, or pleasure in others.

Two-Factor Theory

The Two-Factor Theory, in the context of emotion, suggests that emotional experience arises from a combination of a state of arousal and a cognitive label applied to explain the arousal.