Higher degree of operating leverage than firm

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Reference no: EM131612074

If Firm B has a higher degree of operating leverage than Firm A, which of the following situations would we expect to be true?

Firm A to have a higher expected EBIT but also a higher probability of losses

Firm B to have a higher expected EBIT but also a higher probability of losses

Firm A to have a higher expected EBIT and a lower probability of losses

Firm B to have a higher expected EBIT and a lower probability of losses

Reference no: EM131612074

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