Reference no: EM132842262

Problem 1: Which of the following statement is correct about operating leverage?

Select one:

a. All of the given statements are correct.

b. It describes the relationship between percentage change in EBIT and sales. c. Operating leverage measures how much a company's operating income changes in response to a change in sales.

d. A business that generates sales with a high gross margin and low variable costs has high operating leverage.

Problem 2: Which of the following factor influence a company's beta?

Select one:

a. CAPM model and WACC

b. Operating leverage and financial leverage.

c. Simple interest and compounding interest.

d. Payback period and accounting rate of return

Problem 3: Fred Plc recently conducted an IPO and received $43 per share. The offer price was $45 per share, and the share price rose to $51 per share. What was the percentage daily return?

Select one:

a. 10.16%

b. 11.33%

c. 13.33%

d. 12.62%