Which of the following statements about highly leveraged companies is true?
A)Fixed costs are high and variable costs are low.
B)Large changes in sales volume result in larger changes in net income.
C)There is more risk with highly leveraged companies.
D)All of these answers are correct.

Question

Quizplus · Accepted Answer

Highly leveraged companies have high fixed costs and low variable costs, leading to larger changes in net income with sales volume changes, and they carry more risk.

Which of the Following Statements About Highly Leveraged Companies Is