The increased variability in earnings per share due to the use of debt is:
A)combined leverage.
B)business risk.
C)financial risk.
D)operating risk.

Question

Quizplus · Accepted Answer

The increased variability in earnings per share due to the use of debt is called financial risk. Financial risk refers to the risk that a company's earnings per share will fluctuate drastically as a result of changes in its cost of financing, especially interest payments on its debt. This variability in earnings per share can be a result of factors such as interest rate changes, financing decisions, and economic downturns.

The Increased Variability in Earnings Per Share Due to the Use