Business Risk,which Is the Risk Inherent in a Firm's Assets

question 57

True/False

Business risk,which is the risk inherent in a firm's assets if it uses less than its optimal amount of debt,is one important influence in the capital structure decision.

---

Definitions:

LIBOR

The London Interbank Offered Rate, an interest rate average calculated from estimates submitted by the leading banks in London, used as a reference rate for lending and borrowing between banks.

Tokyo Interbank Rate

A benchmark interest rate at which banks lend to each other in the Tokyo interbank market.

Euribor

The interest rate at which banks lend to each other in euros, serving as an important benchmark for various financial instruments in the Eurozone.

FIFO

The first-in, first-out accounting method of inventory valuation.