Grand Canyon FIN 450 Module 3 Discussion Question

FIN-450 | The Time Value of Money and Fixed-Income Securities

Module 3 DQ 1

The recent Great Recession of 2008-2009 has had significant impact on a wide range of corporate performance. What impact would you predict it had on leverage?  Would financial leverage have increased, decreased, or remained the same? What about operating leverage? Why?

Module 3 DQ 2

What do you think is the relationship between a firm’s operating leverage and its financial leverage? Do you think the two measures are positively correlated, negatively correlated, or unrelated? Explain your answer.