The equity risk derived from a firm's capital structure policy is called _____ risk.
A) Market.
B) Systematic.
C) Extrinsic.
D) Business.
E) Financial.

Question

Quizplus · Accepted Answer

Financial risk is specifically associated with the way a company finances its operations, primarily through debt or equity. This risk arises from the potential that a company will not be able to meet its financial obligations, which is directly related to its capital structure policy.

The Equity Risk Derived from a Firm's Capital Structure Policy