How Does High Business Risk Affect Firm Risk

question 12

Multiple Choice

How does high business risk affect firm risk?

• A)Higher business risk increases the volatility of capital structure.
• B)Higher business risk increases the volatility of EBIT.
• C)Higher business risk increases the volatility of financial costs.
• D)Higher business risk increases the volatility of the firm's asset structure.

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Definitions:

Effective Price

The final price a consumer pays for a product or service after accounting for any discounts, taxes, or additional charges.

Demand Curve

A graph depicting the relationship between the price of a good and the quantity demanded by consumers at those prices.

Per-Unit Burden

The cost or burden imposed on each unit of a good or service, often in the context of taxes or subsidies.

Artificially-Sweetened Beverages

Drinks that contain synthetic sweetening agents instead of natural sugars to provide sweetness with fewer or no calories.