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Leverage, risk

One statement is correct or all are false

When financial leverage is used, the graphical probability distribution of net income would tend to be more peaked than a destribution where no leverage is present, other things held constant

From an operational standpoint the goal of maintaining financial flexibility translates into maintaining adequate reserve borrowing capacity

While business risk varies from one industry to another and can change over time, it affects all firms equally within a particular industry

The optimal capital structure is the one that maximizes EBIT and this always calls for a debt to assets ratio which is lower than the one that maximizes expected EPS

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6.EBIT

One statement is correct or all are false

When financial leverage is used, the graphical probability distribution of net income would tend to be more peaked than a distribution where no leverage is present, other things held constant

From an operational standpoint the goal of maintaining financial flexibility translates into maintaining adequate reserve borrowing capacity

While business risk varies from one industry to another and can change over time, it affects all firms equally within a particular ...

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Answers a multiple choice question.

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