37 Measures of Leverage Flashcards
1
Q
Leverage refers to a company’s use of … … in conducting business
A
fixed cost
2
Q
Leverage … the volatility of a company’s earning s and cash flows, thereby increasing the … borne by investors in the company.
A
increases; risks
3
Q
The … the use of leverage by the company, the more … it is and the … the discount rate that must be used to value the company.
A
higher; risky; higher
4
Q
Leverage is affected by a company’s … structure
A
cost
5
Q
Two types of costs are generally … cost and … cost
A
Variable ; Fixed
