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Business risk is the risk inherent that is part of firm's operations of the firm,...

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Finance

Business risk is the risk inherent that is part of firm's operations of the firm, excluding the financing decisions. Thus, business risk is the uncertainty in future operating income or EBIT as well as operating leverage. Financial risk is the risk added in addition to business risk by the use of debt financing. Debt financing can increase earnings variability and, along with business risk, contributes to the uncertainty of net income.

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