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:

Total Wage Bill

The cumulative amount of money a firm pays to its employees in wages over a specific period.

Domestic Output

The total value of all goods and services produced within a country's borders in a specific period, reflecting the country's economic performance.

Pre-migration

Pre-migration refers to the period and activities before moving or migrating from one location to another, including planning and preparation.

Immigration

The process by which individuals move from one country to another, typically for the purpose of settling, employment, or education.