________ is measured by the proportional amount of debt in the firm's capital structure.
A)Relative risk
B)Business risk
C)Operating risk
D)Financial risk

Question

Quizplus · Accepted Answer

Financial risk is measured by the amount of debt in the firm's capital structure. The more debt a company has, the higher its financial risk because it has to make interest and principal payments to its creditors regardless of its cash flow situation. This can put pressure on the company's profits and cash reserves, making it harder to weather downturns or pursue growth opportunities.

________ Is Measured by the Proportional Amount of Debt in the Firm's