Financial risk is about using more fixed cost financing in the business. Financial leverage does have a significant impact on the shareholder's profits. Justify the statement with a real life example from the business environment reflecting on how the increase amount of fixed cost financing increases the risk of financial distress and impacts the earnings available to shareholders.

Answer rating: 100% (QA)

The statement that financial risk is about using more fixed cost financing in the business is accurate When a company uses more fixed cost financing i... View the full answer