Question: 4. (4.5) Consider two companies that operate in the same line of business and have the same degree of operating level: the Basic Company and
4. (4.5) Consider two companies that operate in the same line of business and have the same degree of operating level: the Basic Company and the Grindlegend Company. The Basic Company and the Grundlegend Com- pany have, respectively, no debt and 50% debt in their capital structure. Which of the following statements is most accurate? Compared to the Basic Company, the Grundlegend Company has (a) a lower sensitivity of net income to changes in unit sales (b) the same sensitivity of operating income to changes in unit sales (c) the same sensitivity of net income to changes in operating income
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