Operating Leverage Means Financing a Portion of a Firm's Earnings

question 68

True/False

Operating leverage means financing a portion of a firm's earnings per share with debt.

---

Definitions:

Pleural Cavity

The slim, fluid-filled gap located between the two pleural layers surrounding each lung, which plays a role in the mechanics of breathing.

Pericardial Sac

A double-walled sac containing the heart and the roots of the great vessels, providing protection against infection and supplying lubrication for the heart.

Myocardium

The thick middle layer of the heart wall composed of cardiac muscle cells; responsible for the heart's contractile activity.

Epicardium

The outermost layer of the heart's wall, part of the heart's protective covering and involved in the production of pericardial fluid.