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 determines a company's EBIT and business risk. f. All of the above answers are correct. g. None of the above answers is correct.
9. 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 determines a company's EBIT and business risk.
f. All of the above answers are correct.
g. None of the above answers is correct.
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