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11 April, 08:41

It is possible for Firms A and B to have identical financial and operating leverage, yet for Firm A to have more risk as measured by the variability of EPS. This would occur if Firm A has more business risk than Firm B. A. TRUEB. FALSE

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  1. 11 April, 12:15
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    A. TRUE

    Explanation:

    Earnings variability is sometimes considered a negative sign as investors do not know whether the company's earnings in one year can be sustained in the next and this would happen with Firm A if it is proven to have more risk
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