The Higher the DOL,the Greater the Firm's Use of Debt

question 17

True/False

The higher the DOL,the greater the firm's use of debt and the more earnings will change following a change in sales.

---

Definitions:

Closely Held

A business that is privately owned, typically with a small number of shareholders, and not publicly traded on stock markets.

Shareholders

Individuals or entities that own one or more shares of stock in a public company, making them partial owners of that company.

IPO

Initial public offering. Stock in a new company offered to the public for the first time. Such stock tends to make a volatile, high-risk investment.

Mutual Funds

Investment programs funded by shareholders that trade in diversified holdings and are managed by professional investment managers.