Financial leverage impacts the performance of the firm by: A) increasing the volatility of the firm's EBIT.
B) decreasing the volatility of the firm's EBIT.
C) decreasing the volatility of the firm's net income.
D) increasing the volatility of the firm's net income
E) None of the above.

D. increasing the volatility of the firm's net income

Explanation:

Financial Leverage simply has to do with using debt in the finance of assets. It should be noted that companies typically fund their growth or invest using either debt or equity.

When the debt financing of a particular company is high, the company's financial leverage will be high and vice versa. It should also be noted that the financial leverage is usually positive in good times.

Financial leverage impacts the performance of the firm by increasing the volatility of the firm's net income.

Therefore, option D is the right answer.

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answer; /// i do believe the correct answer is (possession utility);