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Firms with hgh fixed costs and low variable costs are generally said to have high operating leverage. Firms with high debt are said to have
Firms with hgh fixed costs and low variable costs are generally said to have high | ||||||
operating leverage. Firms with high debt are said to have high financial leverage. | ||||||
Which combination of leverages would provide the highest potential for growth but assumes most risk? | ||||||
a | High Operating Leverage, Low Financial Leverage | |||||
b | High Operating Leverage, High Financial Leverage | |||||
c | Low Operating Leverage, Low Financial Leverage | |||||
d | Low Operating Leverage, High Financial Leverage | |||||
e | All the Same potential and risk |
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