Question $4(1$ point$)$

Which of the following is true regarding the relationship between business risk and capital structure?

Lower variability$/$uncertainty in EBIT encourages the use of less debt in an organization's capital structure

An increased level of operating leverage encourages the use of more debt in an organization's capital structure

A decreased level of operating leverage encourages the use of more debt in an organization's capital structure

Greater variability$/$uncertainty in EBIT encourages the use of more debt in an organization's capital structure