A Company with a High Degree of Operating Leverage Is

question 38

True/False

A company with a high degree of operating leverage is at lesser risk during downturns in the economy.

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Definitions:

Shelf Prospectus

Frequently, companies will file a prospectus and then update it with a short-form prospectus just before an offering. This procedure is termed a shelf prospectus because companies put new securities “on the shelf” and then later sell them when the market is right.

Prospectus Supplement

A document that provides additional information to a prospectus, detailing specifics about an investment offering for potential investors.

Tender Offer

The offer of one firm to buy the stock of another by going directly to the shareholders, frequently over the opposition of the target company’s management.

Private Placement

Private Placement is a method of raising capital through the sale of securities to a relatively small number of select investors rather than through a public offering.