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Which of the following statements is most correct? Which of the following statements is most correct? Operating leverage determines how income from operations is to
Which of the following statements is most correct? Which of the following statements is most correct? Operating leverage determines how income from operations is to be divided between debt holders and stockholders. Technology is a key key determinant of operating leverage. A firm with a low degree of combined leverage will, other things being equal, experience higher earnings in the expansionary part of the business cycle. The use of debt is not typically needed for firms in industries that offer some degree of stability, are in a positive stage of growth, and are operating in favorable economic conditions. If economic conditions were expected to be favorable, an investor would likely prefer a firm with a low degree of leverage
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