Business Finance- Operating Leverage

Fill in the blanks with the appropriate answers.

1.

An increase in operating leverage ________ risk.

2.

An increase in operating leverage ________ fixed asset turnover.

3.

A decrease in financial leverage ________ risk.

4.

An increase in financial leverage ________ fixed asset turnover.

5.

If a firm issues bonds, financial leverage ________.

6.

An increase in the successful use of financial leverage ________ the return on equity.

7.

An increase in the tax rate ________ the cost of debt.

8.

An increase in the use of preferred stock ________ financial leverage.

9.

A decrease in the tax rate ________ the cost of preferred stock.

10.

A decrease in sales ________ interest expense.

 
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