1040. Financial risk is most associated with_______________.

the use of equity financing by corporations
the use of debt financing by corporations
Equity investments held by corporations
Debt investments held by corporations.
✅ The correct answer is B.
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.

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