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    Degree of operating leverage

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    Please give your opinion on the following two questions:

    1) I feel financial leverage is a better risk than operating risk...

    2) The two types of leverage (DOL) and (DFL) are both risky, however, it is extremely risky combining the two together...

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    https://brainmass.com/business/finance/degree-operating-leverage-risks-292122

    Solution Preview

    1) I feel financial leverage is a better risk than operating risk?
    Financial leverage is related to the fixed financial costs and operating risk is related to the operational fixed costs. Both kinds of leverages add to the risk. Hence we cannot say that one is ...

    Solution Summary

    The solution discusses the degree of operating leverage.

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