If a Firm's Degree of Total Leverage (DTL)is 8

Multiple Choice

If a firm's degree of total leverage (DTL) is 8.0,which of the following must be correct?

A) The firm must have fixed operating costs.
B) The firm must have fixed financial costs.
C) The firm must have both fixed operating costs and fixed financial costs.
D) The firm must have some fixed costs,but not enough information is given to determine whether the fixed costs are operating,financial,or both.
E) With the information given,we cannot tell whether the firm has any fixed costs (either operating or financial) at all.