explain financial risk???Why does it increase?
Answers
ANSWER☺️
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The economic climate and markets can be affected very quickly by changes in exchange rates, interest rates,and commodity prices. Financial risk is the possibility that shareholders will lose money when they invest in a company that has debt, if the company's cash flow proves inadequate to meet its financial obligations. When a company uses debt financing, its creditors are repaid before its shareholders if the company becomes insolvent. Financial risk also refers to the possibility of a corporation or government defaulting on its bonds, which would cause those bondholders to lose money.
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hey!!
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Answer:-
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✌It is a type of risk of im which company not being able to cover its fixed financial costs.
✌it's level increase when risks are attached to higher degrees of
financial leverage.
✌when increase in fixed financial costs. the company its also need to raise.
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