16.3 Business risk is unaffected by capital structure. As the financing mix changes, whatever equity is outstanding
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16.3 Business risk is unaffected by capital structure. As the financing mix changes, whatever equity is outstanding must absorb the fixed business risk of the firm. The less equity, the more risk absorbed per share. Therefore, as capital structure changes, assets is held fixed while requity adjusts.
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Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780073382302
6th Edition
Authors: Richard A Brealey, Stewart C Myers, Alan J Marcus
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