Asked by
Emily Matos
on Dec 01, 2024Verified
Increasing debt only increases the risk of bondholders and does not affect the risk of stockholders.
Debt
An amount of money borrowed by one party from another, often used by companies and governments to finance projects and operations.
Risk
The potential for losing something of value, often used in the context of investments where there is a possibility of financial loss.
- Differentiate between risks associated with business operations and financial liabilities.
Verified Answer
MT
Learning Objectives
- Differentiate between risks associated with business operations and financial liabilities.