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8. Analyzing riskiness using a firm's degree of leverage Select the degree of leverage that completes the following sentence. The is the percentage change in

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8. Analyzing riskiness using a firm's degree of leverage Select the degree of leverage that completes the following sentence. The is the percentage change in EPS that results from a given percentage change in sales, and it equals the product of the degrees of operating and financial leverage. Expert Analysts Resources (EAR) has provided you with the following information about three companies you are currently evaluating: Kumatsu Motors Co. Praxis Corp. 2.0 Transworld Corp. 3.0 3.0 Degree of Operating Leverage (DOL) Degree of Financial Leverage (DFL) 6.5 4.0 3.5 According to this information, which company would be considered the risklest? Okumatsu Motors Co. O Praxis Corp. O Transworld Corp. Grade It Now Save & Continue 09 8. Analyzing riskiness using a firm's degree of leverage Select the degree of leverage that completes the following sentence. The the is the percentage change in EPS that results from financial leverage. degree of financial leverage (DFL) Expo degree of total leverage (DTL) ded you with the following information about three compa degree of operating leverage (DOL) Praxis Corp. Transworld Corp. 3.0 Kumatsu Motors Degree of Operating Leverage (DOL) Degree of Financial Leverage (DFL) 2.0 3.0 6.5 4.0 3.5 According to this information, which company would be considered the riskiest? Okumatsu Motors Co. O Praxis Corp. Transworld Corp. Grade 1 80 F3 SRB F2 F4 F5 Fb $ # 3 % 2

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