Which of the following increases with use of leverage in a business?
A)Financial risk
B)Liquidity risk
C)Environmental risk
D)Inflation risk

Question

Quizplus · Accepted Answer

Financial risk increases with the use of leverage in a business. Leverage involves borrowing money to finance a business, which amplifies potential gains but also the risk of losses. Higher leverage means higher interest payments, which can negatively impact a company's financial health and ultimately increase the risk of default.

Which of the Following Increases with Use of Leverage in a Business