Examlex
Which of the following would experience the least continentality?
MM Model
The Modigliani-Miller theorem, proposing that in a perfect market, the value of a firm is unaffected by how it is financed, whether through debt or equity.
Financial Leverage
The use of borrowed funds with a fixed cost to enhance the potential return on investment.
Bankruptcy Risk
The risk that a company will be unable to meet its financial obligations and thus may have to declare bankruptcy.
Operating Leverage
A measure of how sensitive a company's operating income is to a change in revenue, indicating the level of fixed versus variable costs.
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