It refers to a position when a company is unable to meet its fixed financial charges namely interest payment, preference dividend and repayment obligations.
Name the concept highlighted in the above lines:
It refers to a position when a company is unable to meet its fixed financial charges namely interest payment, preference dividend and repayment obligations.
Name the concept highlighted in the above lines:
Solution
✅ Correct Option: 3
Financial risk refers to the position when a company is unable to meet its fixed financial charges including interest payments, preference dividends, and repayment of principal. Higher debt in capital structure increases financial risk.
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