Which of the Following Statements Is CORRECT

question 41

Multiple Choice

Which of the following statements is CORRECT?

• A) The factors that affect a firm's business risk are affected by industry characteristics and economic conditions.Unfortunately, these factors are generally beyond the control of the firm's management.
• B) One of the benefits to a firm of being at or near its target capital structure is that this eliminates any risk of bankruptcy.
• C) A firm's financial risk can be minimized by diversification.
• D) The amount of debt in its capital structure can under no circumstances affect a company's business risk.
• E) A firm's business risk is determined solely by the financial characteristics of its industry.

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Definitions:

Groups

Collections of individuals who come together to form a unit or a team, often with a common goal or purpose.

Father Smokes

A situation where a child's father habitual engages in smoking tobacco, potentially influencing the child's environment and health.

Pregnant Mother

A woman in the state of carrying a developing embryo or fetus within her body.

Infant

An infant or newborn, generally younger than one year old.