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Suppose a firm has a degree of operating leverage of 2 and the firm employs no debt. Which of the following is true? A) The
Suppose a firm has a degree of operating leverage of 2 and the firm employs no debt. Which of the following is true?
A) The degree of operating leverage equals the degree of combined leverage.
B) The degree of operating leverage equals the degree of financial leverage.
C) The degree of combined leverage is undefined.
D) The degree of financial leverage equals zero.
E) The firm has no business risk.
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