Question

For a company, financial risk arises from the use of _____. common equity fixed-income securities such...

  1. For a company, financial risk arises from the use of _____.
  1. common equity
  2. fixed-income securities such as bonds
  3. fixed operating costs
  4. retained earnings
  5. all of the above
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Homework Answers

Answer #1

Option B is correct

This is the reason because the debt holders should get paid the interest irrespective of the company financial status and the company is subject to the interest rate risk also. So the most effected by the debt holders only.

The common equity will not give financial risk because they are not liable directly to the customer to pay money.

Retained earnings will make company more profitable, so it does not give risk

The operational costs try to make the company more profitable .

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