The Coda Corp. in 2016 had an operating leverage effect = 3, and a financial leverage effect = 1.333. The total leverage effect is
A) 1.667
B) 4
C) 4.333
D) Cannot be determined

Name: The Coda Corp. in 2016 had an operating leverage effect = 3, and a financial leverage effect = 1.333. The total leverage effect is A) 1.667 B) 4 C) 4.333 D) Cannot be determined
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Question

Quizplus · Accepted Answer

Total Leverage Effect = Operating Leverage Effect x Financial Leverage Effect
= 3 x 1.333
= 4