Q94
Financial risk is most associated with_______________.
A.
the use of equity financing by corporations
B.
the use of debt financing by corporations
AnswerC.
Equity investments held by corporations
D.
Debt investments held by corporations.
Answer: Option B
Solution
Answer: Option B
Solution:
Financial risk is most associated with the use of debt financing by corporations. Financial risk is the risk that a company won't be able to meet its obligations to pay back its debts. Which in turn could mean that potential investors will lose the money invested in the company. The more debt a company has, the higher the potential financial risk.