The Level of Financial Risk to Which a Firm Is

question 89

Multiple Choice

The level of financial risk to which a firm is exposed is dependent upon the firm's:

• A) tax rate.
• B) debt-equity ratio.
• C) return on assets.
• D) level of earnings before interest and taxes.
• E) operational level of risk.

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Definitions:

Lessee

A person who pays for the use or possession of another’s property.

Shipment Contract

A contract in which the seller is required to ship the goods by carrier. The buyer assumes liability for any losses or damage to the goods after they are delivered to the carrier. Generally, a contract is assumed to be a shipment contract if nothing to the contrary is stated in the contract.

Destination

The place to which someone or something is going or being sent.

Identification

The process of recognizing or establishing the identity of a person or thing, often used in security and legal contexts.