medium · Corporate Credit Analysis fsa

In a downside stress scenario, an analyst evaluates the degree of operating leverage (DOL) for a manufacturer.

If revenue is $500M, variable costs are 60% of revenue, and fixed costs are $100M, what is the DOL?

  1. 2.0x
  2. 1.25x
  3. 5.0x
  4. 0.5x

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