Journal article
The relationship between operating leverage and financial leverage
Abstract
Abstract We model the relationship between operating and financial leverage. When operating leverage is exogenously specified, financial leverage is a monotonically decreasing function of operating leverage. When financial leverage is exogenously specified, operating leverage is initially increasing and subsequently decreasing in financial leverage. Finally, when both operating and financial leverage are chosen by the firm, they can be …
Authors
Sarkar S
Journal
Accounting and Finance, Vol. 60, No. S1, pp. 805–826
Publisher
Wiley
Publication Date
April 2020
DOI
10.1111/acfi.12374
ISSN
0810-5391