Practice mode Finance

Which term refers to the extent to which fixed-income securities, such as debt and preferred stock, are used in a firm’s capital structure?

Correct answer A. Financial risk

Explanation

Fixed payments on debt and preference shares must be met regardless of earnings, so heavier use of them adds financial risk for ordinary shareholders.

Report a problem

Answer checked How we write and check questions

Tip: press A, B, C or D to answer, and N for the next question.

Advertisement

Have a question about this answer?

Your email address will not be published. Required fields are marked *

Links and website addresses are not allowed in comments.