What is ‘Financial Risk?’ Why does it arise?
Financial risk is a situation when a company is not able to meet its fixed financial charges. The fixed financial charges are the :-
- Interest that is to be paid on borrowed capital and
- Rate of dividend to be paid on preference capital.
Is there an error in this question or solution?
Solution What is ‘Financial Risk?’ Why Does It Arise? Concept: Financial Decisions - Financing and Dividend.