Which of the Following Statements Is Correct

Multiple Choice

Which of the following statements is correct?

A) A firm's business risk is solely determined by the financial characteristics of its industry.
B) The factors which affect a firm's business risk are determined partly by industry characteristics and partly by economic conditions.Unfortunately,these and other factors which affect a firm's business risk are not subject to any degree of managerial control.
C) One of the benefits to a firm of being at or near its target capital structure is that financial flexibility becomes much less important.
D) The firm's financial risk may have both market risk and diversifiable risk components.
E) The above statements are all false.