Financial risk is defined as the expected variation in EBIT.

Name: Financial risk is defined as the expected variation in EBIT.
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Quizplus · Accepted Answer

Financial risk refers to the risk associated with the use of financial leverage by a company, specifically focusing on the potential for increased variability in earnings and cash flow due to the cost of debt financing, rather than the variation in EBIT (Earnings Before Interest and Taxes) which is more closely related to business risk.

Financial Risk Is Defined as the Expected Variation in EBIT