Operating leverage effect
Briefly explain the operating leverage effect and the reason for it to occur? What are the advantages and limitations of high operating leverage?
Expert
Operating leverage effect is a phenomenon where a small variation in sales triggers a relatively large variation in operating income. It is due to the presence of fixed operating costs. The advantages of high operating leverage are that if sales are increasing operating income will go up more quickly. The ill-effects are that declining sales will result in operating income to drop more quickly, including negative values.
Define the term Hedging using implied volatility?
We focus more on cash flows rather than profits when estimating proposed capital budgeting projects. Explain.
Normal 0 false false
Under what circumstances will warrant’s value be high? Explain.
How much more demand of return is appropriate for a share of common stock by risk-averse investors, when compared to a Treasury bill?
Explain asymptotic analysis in interest rate model.
Where can we get incomplete markets?
The discussion of zero-coupon bonds in the text gave an instance of two zero-coupon bonds issued through Commerzbank. The DM300, 000,000 issues due in the year of 1995 sold at 50 percent of face value and the DM300, 000,000 due in the year of 2000 sold a
Why is volatility annualized standard deviation of return?
18,76,764
1929932 Asked
3,689
Active Tutors
1451445
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!