Financial Risk Refers to the Extra Risk Borne by Stockholders

question 41

True/False

Financial risk refers to the extra risk borne by stockholders as a result of a firm's use of debt as compared with their risk if the firm had used no debt.

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Definitions:

Future Oriented

A mindset or perspective that focuses on planning or thinking about future events, achievements, or goals.

Constructive Coping

Positive strategies used to deal with stress, challenges, or adversity.

Appraisal-focused

Involves modifying the way one thinks about a stressful situation or challenge.

Emotion

A complex psychological state that involves a subjective experience, a physiological response, and a behavioral or expressive response.