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How does high business risk affect firm risk? Higher business risk increases the volatility of capital...

How does high business risk affect firm risk?

Higher business risk increases the volatility of capital structure.
Higher business risk increases the volatility of EBIT.
Higher business risk increases the volatility of financial costs.
Higher business risk increases the volatility of the firm's asset structure.

Solutions

Expert Solution

Higher business risk increases the volatility of EBIT.
Higher business risk leads to uncertainty in generating revenues for the business
Earnings before Interest and Tax (EBIT) is directly influenced by revenues of the business.
Option B is correct

ekkarill92 answered 2 years ago
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