Statements about combined leverage

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Which of the following statements about combined leverage (operating & financial) is true?

If a firm employs both operating and financial leverage, any percent change in sales will produce a larger percent change in earnings per share.

A firm that is in a capital-intensive industry should use a higher level of financial leverage than a firm that employs low levels of operating leverage.

Usage of both operating and financial leverage reduces a firm's risk.

Reference no: EM131188484

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