A high degree of variability in a firm's earnings before interest and taxes refers to
A) business risk.
B) financial risk.
C) financial leverage.
D) operating leverage.

Question

Quizplus · Accepted Answer

Business risk refers to the variability in a firm's earnings before interest and taxes (EBIT) due to its operational environment. This includes factors like demand for the firm's products, input costs, and competition, which can all affect earnings independently of how the firm is financed.

A High Degree of Variability in a Firm's Earnings Before