The uncertainty associated with the use of debt to finance an enterprise is financial risk.

Name: The uncertainty associated with the use of debt to finance an enterprise is financial risk.
Brand: Quizplus
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Question

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Financial risk refers to the additional risk placed on the shareholders due to the decision to finance with debt, which introduces fixed financial obligations (interest payments) and increases the variability of the firm's net income and potential for insolvency.

The Uncertainty Associated with the Use of Debt to Finance