Financial risk is:
A) the risk inherent in a company's operations.
B) a type of unsystematic risk.
C) inversely related to the cost of equity.
D) dependent upon a company's capital structure.
E) irrelevant to the value of a company.

Question

Quizplus · Accepted Answer

Financial risk is dependent upon a company's capital structure, as it relates to the potential impact on a company's earnings and cash flow due to its use of debt financing.

Financial Risk Is