1. Which of the following factors do not influence the firm's P/E ratio?
A. Past earnings
B. Shares outstanding
C. Volatility in business performance
D. All of the options influence the firm’s P/E ratio.
2. A high degree of operating leverage means
A. there are high labor costs.
B. there is high debt.
C. there is a large amount of equity.
D. there are high fixed costs.