The Reason That Financial Leverage Increases Shareholder Risk Is That

question 79

Multiple Choice

The reason that financial leverage increases shareholder risk is that there is:

• A) more debt which increases the operating risk.
• B) less equity to absorb the operating risk.
• C) less business risk to be spread around.
• D) more financial risk due to reduced business risk.

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Definitions:

Resource-Oriented Team

Describes a group of individuals organized with a focus on efficiently utilizing resources (human, technical, financial) to achieve its goals.

Conflict Management Strategies

Techniques and methods used to handle and resolve conflicts in a constructive manner within an organization.

Cooperative Strategy

A strategic approach where organizations or individuals work together towards mutual goals, often involving partnerships, alliances, or collaborative projects.

Win-Win Outcomes

Situations where all participating parties benefit or achieve their objectives.