Which of the Following Statements Is CORRECT

question 44

Multiple Choice

Which of the following statements is CORRECT?

• A) A firm's business risk is determined solely by the financial characteristics of its industry.
• B) The factors that affect a firm's business risk include industry characteristics and economic conditions,both of which are generally beyond the firm's control.
• C) One of the benefits to a firm of being at or near its target capital structure is that this generally minimizes the risk of bankruptcy.
• D) A firm's financial risk can be minimized by diversification.
• E) The amount of debt in its capital structure can under no circumstances affect a company's EBIT and business risk.

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Definitions:

Extraverted

Extraverted describes a personality trait characterized by outgoingness, sociability, and a preference for external stimulation over introspection.

Intelligent

The ability to learn, understand, and apply knowledge, solve problems, and adapt to new situations.

Selection Process

The method by which individuals are screened and chosen for a role, position, or admission to an organization or institution.

Structured Interview

A systematic method of interviewing where all candidates are asked the same predetermined questions in the same order.