Explain difference between business risk and financial risk

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Reference no: EM131337022

1. Explain the difference between business risk and financial risk.

2. What other factors besides operating leverage can affect a firm's business risk?

3. Referring to Table 13.2, calculate the market value of firm L (without a corporate income tax) if the equity amount in its capital structure decreases to $5,000 and the debt amount increases to $5,000. At this capital structure, the cost of equity is 15 percent.

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Reference no: EM131337022

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