Business Finance- Operating Leverage

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.