Company X is more exposed to market risk than Company Y. Company> can compensate for this by using less financial leverage. As a consequence, the uncertainty of both firms' anticipated EBITS could be similar.

Company X is more exposed to market risk than Company Y. Company> can compensate for this by using less financial leverage. As a consequence, the uncertainty of both firms' anticipated EBITS could be similar.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter13: Capital Budgeting: Estimating Cash Flows And Analyzing Risk

Section: Chapter Questions

Problem 11Q

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Company X is more exposed to market risk than Company Y. Company X
can compensate for this by using less financial leverage. As a
consequence, the uncertainty of both firms' anticipated EBITS could be
similar. *
Correct
O Wrong

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