Which of the Following Statements Is CORRECT

question 44

Multiple Choice

Which of the following statements is CORRECT?

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

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Definitions:

Frequency

The frequency at which an event happens within a specific time frame or sample size.

Pitch

The quality of a sound determined by the frequency of the sound waves, which translates to the highness or lowness of a tone.

Oscilloscope

An electronic test instrument that graphically displays varying signal voltages, usually as a two-dimensional plot of one or more signals as a function of time.

Sound Waves

Echoes that journey through air or alternative mediums, reaching a state of audibility when they approach an individual's or creature's ear.