_____ is related to a company's cost structure rather than to its capital structure.
A)Fixed/variable cost leverage
B)Operating leverage
C)Financial leverage
D)Capital leverage

Question

Quizplus · Accepted Answer

Operating leverage refers to the degree of fixed costs a company incurs in its operations. It is a measure of how sensitive a company's operating income is to changes in revenue. It is related to a company's cost structure rather than its capital structure, making it the correct choice. Option A, fixed/variable cost leverage, is not a commonly used term in finance. Option C, financial leverage, refers to a company's capital structure and the use of debt financing. Option D, capital leverage, is not a commonly used term in finance.

_____ Is Related to a Company's Cost Structure Rather Than