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What does risk taking have to do with the use of operating and financial leverage?

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Operating leverage---the use of fixed resources
Financial leverage---the use of debts
Both operating and financial leverage imply that the firm will employ a heavy component of fixed cost resources. This is inherently risky because the obligation to make payments remains regardless of the condition of the company or the economy.

First answer by Student01. Last edit by Ryan2211hoo. Contributor trust: 2 [recommend contributor ]. Question popularity: 21 [recommend question].

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