Financial Leverage Impacts the Performance of a Firm By

question 14

Multiple Choice

Financial leverage impacts the performance of a firm by:

• A)increasing the volatility of the firm's EBIT.
• B)decreasing the volatility of the firm's EBIT.
• C)decreasing the volatility of the firm's net income.
• D)increasing the volatility of the firm's net income
• E)lowering the firm's level of risk.

---

Definitions:

Unconscionable

Describes an agreement so unfair or unjust that it shocks the conscience, often deemed unenforceable by courts.

Resale of Goods

The act of selling an item that has already been purchased, typically referring to the sale of goods by businesses to consumers.

Broken Contract

A situation where one or more parties fail to fulfill the terms and conditions outlined in a legally binding agreement.

Specific Performance

A judicial order compelling a party to execute their duties as specified in a contract instead of compensating with damages for contract violation.