Which of the Following Statements Is Most Correct

question 85

Multiple Choice

Which of the following statements is most correct?

• A)The degree of combined leverage measures the sensitivity of earnings per share ininto changes 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:

Economy

The system of production, distribution, and consumption of goods and services within a society, influencing its wealth and living standards.

Low Skill Level

Referring to jobs or tasks that require a minimal amount of training or education to perform.

Little Autonomy

A situation where there is scant or limited independence or self-governance within a subsystem or entity.

Assembly Line

A manufacturing process in which parts are added to a product in a sequential manner to create a finished product more efficiently.