Now look at the equation for the optimal bankruptcy point in the lectures slides: VB=r+(1/2)2(1)C. This equation computes the optimal bankruptcy point for shareholders of the levered firm. They declare bankruptcy if and only if unlevered firm value falls below VB. VB in this equation is shown to be a function of the volatility of the firm's cash flows, . How does increasing volatility increases the willingness of shareholder to declare bankruptcy? Is the relationship between risk and the willingness to declare bankruptcy in Leland consistent with the answer you obtained for xBox