Problem
A. Describe business risk.
B. Describe financial risk.
C. Explain the concept of Financial leverage.
D. Muddy Murphy's degree of financial leverage is 4x. The company knows that if sales are 6 percent higher than forecasted , its EPS will increase by 36 percent. What is Muddys degree of operating leverage?
E. Explain reserve borrowing capacity.
F. Explain the difference between symmetric information and asymmetric information.