Which of the following is the risk that is a function of a company's degree of leverage?
A)Capital risk
B)Financial risk
C)Business risk
D)Credit risk

Question

Quizplus · Accepted Answer

Financial risk is the risk that arises from a company's degree of leverage or its ability to meet its financial obligations. A highly leveraged company has more financial risk than a company with lower levels of leverage. Capital risk refers to the risk of losing capital due to market conditions, business risk refers to the risk of losses due to factors related to a company's operations, and credit risk refers to the risk of default by borrowers or counterparties.

Which of the Following Is the Risk That Is a Function