Q. What do you mean by Business Risk?
Business risk is that portion of the unsystematic risk caused by the operating environment of the business. Business risk arises from the inability of a firm to maintain its competitive edge and the growth or stability of the earnings. Variation that occurs in the operating environment is reflected on the operating income and expected dividends. The Variation in the expected operating income indicates the business risk.Business risk can be divided into external business risk and internal business risk.