1451. Relationship between change in sales and change M is measured by _________.
A. Financial leverage
B. Combined leverage *
C. Operating leverage
D. None of the above
1452. Operating leverage works when ________?
A. Sales increases
B. Sales decreases
C. Both A and B *
D. None of A and B
1453. Which of the following is correct ?
A. CL=OL+FL
B. CL=OL-FL
C. OL=OL*FL
D. OL=OL/FL
1454. If the fixed cost of production is zero, Which one of the following is correct ?
A. OL is zero
B. FL is zero
C. CL is zero
D. None of the above *
1455. If a firm has no debt, which one is correct ?
A. OL is one
B. FL is one *
C. OL is zero
D. FL is zero
1456. If a company issues new share capital to redeem debentures, then _____.
A. OL will increase
B. FL will increase
C. OL will decrease
D. Fl will decrease *
1457. If a firm has a DOL of 2.8, It means _______.
A. If sales increase by 2.8% the EBIT will increase by 1%
B. If EBIT increase by 2.896 ,The EPS will increase by 1%
C. If sales rise by 1% ,EBIT will rise by 2.8% *
D. None of the above
1458. Higher OL is related to the use of higher______.
A. Debt
B. Equity
C. Fixed cost *
D. Variable cost
1459. High FL is related the use of ___________.
A. Higher equity
B. Higher debt *
C. Lower debt
D. None of the above
1460. In order to calculate EPS, profit after tax and preference dividend by____________.
A. MP of equity shares
B. Number of equity shares *
C. Face value of equity shares
D. None of the above