1. Define leverage as it is used in finance.
2. Define and give examples of the following:
a. Fixed costs
b. Variable costs
3. Define the following:
a. Operating leverage
b. Financial leverage
4. How is a firm's degree of combined leverage (DCL) related to its degrees of operating and financial leverage?
5. Is it possible for a firm to have a high degree of operating leverage and a low level of business risk? Explain.
6. Is it possible for a firm to have a high degree of combined leverage and a low level of total risk? Explain.