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Is there a risk of having both high operating leverage and high finanical leverage

2007-01-23 05:48:07 · 1 answers · asked by **LIBERTY** 1 in Education & Reference Homework Help

1 answers

My opinion:

The higher the leverages, the greater the risks. Having two high leverages is probably additive using a semi-log or log-log scale. Basically, if the two leverages are at the same level, the risk has increased 2 (squared) or 4 times the original leverage.

2007-01-26 12:39:33 · answer #1 · answered by tom_terrific73 4 · 0 0

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