The degree of total leverage is equal to the degree of ____ multiplied by the ____.
A)operating leverage, variable cost ratio
B)financial leverage, variable cost ratio
C)operating leverage, degree of financial leverage
D)operating leverage, fixed cost ratio

Question

Quizplus · Accepted Answer

The degree of total leverage is a measure that combines the effects of operating leverage (which is related to fixed operating costs) and financial leverage (which is related to fixed financial costs). It is calculated by multiplying the degree of operating leverage by the degree of financial leverage.

The Degree of Total Leverage Is Equal to the Degree