Question: The following table summarizes the percentage changes in operating income, percentage changes in revenue, and betas for four pharmaceutical firms. a. Calculate the degree of

The following table summarizes the percentage changes in operating income, percentage changes in revenue, and betas for four pharmaceutical firms.

The following table summarizes the percentage changes in operating income,

a. Calculate the degree of operating leverage for each of these firms.

b. Use the operating leverage to explain why these firms have different betas.

% Change in % Change in Revenue Firm Operating Income Beta PharmaCorp SynerCorp BioMed Safemed 27 25 23 21 25 32 36 40 L00 1.15 1.30 1.40

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