Firms deal with different types of risk in their day-to-day operatians and adopt risk management strategies. It is important to understand why firms munage risk. A company's share price is a function of two factors: the discounted yalue of its free cash flows and its weighted average cost of capital (WACC) According to financial theory, the company's managers should accept and implement a risk management strategy if the implementation of the strategy leads to an increase in the price of the firm's common stock, An increase in share price will sccur when the strategy invikes firm's expected future free cash flows andlor the company's WACC. Fiorence Fashion Footweor Company has applied risk management techniques in an effort to feduce the volatily of its cash flows and to decrease the probability of ts bankruptcy. Whuch of the following objectives is management attempting to achieve through its use af risk management techniques? Check all that applys. Improve management's opportunities for eaming bonuses and additional compensation Develop comparative advantage in hedging Improve its ability to attract lower-cost debt capital and expand its debt capacity