Which of the Following Statements Is CORRECT

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.