Which of the Following Statements Is Correct Regarding Financial Risk

question 73

Multiple Choice

Which of the following statements is correct regarding financial risk?

• A)Financial risk refers to the extra risk shareholders bear as a result of using preferred shares as compared with the risk they would bear if new debt were used.
• B)Financial risk refers to the reduced risk shareholders bear as a result of using debt as compared with the risk they would bear if no debt were used.
• C)Financial risk refers to the extra risk shareholders bear as a result of using accounts payable as compared with the risk they would bear if new long-term debt were issued.
• D)Financial risk refers to the extra risk shareholders bear as a result of using debt as compared with the risk they would bear if no debt were used.

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