The use of fixed-cost financing is referred to as ______________. Therefore, it is a direct function of the ratio of _______________ to EBIT. The use of fixed cost sources of funds, such as ________ and _____________ affect a firms financial risk.

Word bank:

Capital, Capital gain, Capital rationing, Cash outflows, Cheapest, Cost of capital, Debt, Equity, Externalities, Financial- leverage, Fluctuating, Higher, Hybrid, Incremental CFs, Independent, Interest expense, Investors, IRR, Most expensive, Mutually exclusive, Negative, New stock, NPV rule, Open- market, Operating leverage, Opportunity, Overvalued, Positive, Preferred stock, Shareholders, Sunk, WACC