Question

Select the correct term for each of the following descriptions. These are not necessarily complete definitions, but there is only one possible answer for each term. Descriptions Terms The level and nature of risk attributable to a firm's activities and operations, and ignoring the risks associated with the firm's capital structure. The situation in which outsiders, such as external shareholders, credits, suppliers, and customers have less and inferior information about a firm's past, current, and future conditions and prospects, compared to the firm's managers. A firm's use of relatively high fixed, as opposed to variable, operating costs, such as capital-intensive productive processes instead of labor-intensive methods. The practice of employing a capital structure that contains a large proportion of fixed-cost sources of financing, such as debt securities and preferred stock. The ability of a firm to borrow money at a reasonable cost when good investment opportunities arise because it currently less debt than that suggested by its optimal capital structure. An action taken by a firm's management that provides clues to investors about how management views the firm's prospects. The risk that is borne solely by the firm's shareholders, and results from a firm's decision to finance its assets using fixed-cost sources of capital, including debt securities and preferred stock.

Answer 1

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y.change in EBIT .chanse in EPs xchange in Sala changein EeaT X (b yariabla ar fired