Which one of the following is the equity risk related to capital structure policy?
A) Market risk
B) Systematic risk
C) Static risk
D) Business risk
E) Financial risk

Question

Quizplus · Accepted Answer

Financial risk is the equity risk related to capital structure policy. This refers to the risk that comes from the use of debt to finance a company's operations, which can lead to increased financial leverage and potentially higher returns for equity holders. However, it also increases the risk of insolvency and bankruptcy, which can result in a significant reduction in the value of a company's equity. Market risk, systematic risk, static risk, and business risk are all related to different issues, such as market fluctuations, overall economic conditions, and the specific risks associated with a particular business or industry.

Which One of the Following Is the Equity Risk Related