The relationship between operating and financial leverage

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1.Given the following statement, please indicate whether it is true or false, and why: "The relationship between operating and financial leverage is additive rather than multiplicative" (Limit your answer to less than 100 words)

2.Tangshan Mining has 100,000 shares outstanding and just declared a 20% stock dividend. Before the announcement, the firm's shares were trading at $50.00 per share. After the stock dividend, the firm's shares should trade at ________ per share. (Please calculate the arithmetic solution and show your work)

 

Reference no: EM13286412

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