Which of the following two statements is correct? S1: Business risk of a company increases if the company becomes more financially leveraged.

S2: Holding all else constant, international exposure (when a U.S. company starts to operate internationally) will increase business risk.

1)S2 is correct but S1 is false

2)S1 is correct but S2 is false

3)Both, S1 and S2 are correct

4)Both, S1 and S2 are false

Maximizing stock price

1)Is the main goal of financial managers, this is consistent with picking a capital structure that minimizes WACC

2)Is fairly simple and managers pick the optimal capital structure that minimizes operating leverage. These two goals are consistent.

3)Can be achieved by increasing the firms debt level as high as possible because of the value of the tax shield, debt has an exclusively positive effect on firm value

4)Is not the main goal of financial managers because their job is to maximize the companys profits.