What are some determinants of business risk?

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What are some determinants of business risk?

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What are some determinants of business risk?

Explanation & AnswerSolution by a verified expert

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Business risk is an uncertainty that varies from company to company.

Explanation

Business risk is the uncertainty surrounding the firm's operations without considering the type of financing the firm uses. All of the listed determinants relate to the unpredictability of the results of business performance.

Verified Answer

The determinants of business risk include the following:

Rivalry among competitors
Variation in units sold
Variation in selling price
Variation in the input cost
Product obsolescence
Exposure in foreign operations
Regulatory risk and legal exposure
The extent to which costs are fixed: Operating leverage

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