The single largest interest rate risk of a firm is:
A) interest sensitive securities.
B) debt service.
C) dividend payments.
D) accounts payable.

Question

Quizplus · Accepted Answer

Debt service refers to the payment of principal and interest on outstanding debt. As interest rates rise, the cost of debt service for a firm will increase, which can have a significant impact on its financial performance. Therefore, debt service is the single largest interest rate risk for a firm.

The Single Largest Interest Rate Risk of a Firm Is