answersLogoWhite

0


Best Answer

yes

User Avatar

Wiki User

11y ago
This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: Should firms with higher business risk have lower leverage?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Related questions

The debt ratio is a measure of a firms what?

Leverage


On what criteria should business continuity consulting firms be judged on?

Business continuity consulting firms should be judged on their integrity, honesty, and business sense. One should also look at their track record. One should also compare firms to one another.


What is the financial leverage multiplier?

The leverage multiplier equals to total asset dividing by shareholders' equity. The high leverage multiplier indicates that the firms decide to overcome the high levels of borrowing or debt on which it must pay interest. The higher ratio means higher liability than its shareholders' equity. Essentially, the ratio is mainly used to help firms making decision about how to raise funds by undertaking debts. A company will only undertake significant amounts of debt when it believes that return on assets (ROA) will be higher than the interest on the loan.


What is Financial leverage multiplier?

The leverage multiplier equals to total asset dividing by shareholders' equity. The high leverage multiplier indicates that the firms decide to overcome the high levels of borrowing or debt on which it must pay interest. The higher ratio means higher liability than its shareholders' equity. Essentially, the ratio is mainly used to help firms making decision about how to raise funds by undertaking debts. A company will only undertake significant amounts of debt when it believes that return on assets (ROA) will be higher than the interest on the loan.


What do you mean by leverage?

basically leverage is the employment of assets or sources of finance for which firms pays fixed cost or fixed return.


Why people use going-rate-pricing for their business?

Most firms are influenced by the prices that their competitors are charging.A business cannot ignore the prices being charged for similar goods by other firms in the same area.The normal situation is for firms in the same area to charge similar prices.A business that charges higher prices than its competitors would soon be out of business.


Does financial leverage always increase the earning per share?

no, not for loss making firms


What types of firms or what industry sectors might it be prudent to limit operating leverage?

susmita


How do small firms survive?

Small firms survive by producing quality products. They also leverage any other competitive advantage they may have in the industry.


Types of global business environment?

There are many types of business environments. these can include competitor, technological, supplier, and socio-economic. These are the different situations that a business will come up against.


Who own the factor of production?

Business firms own the factors of production.


Which English firms are known to be the best?

You should be a bit more specific. -'Best' in what field or business for instance.