Why do companies in different industries often have different levels of risk?© BrainMass Inc. brainmass.com October 10, 2019, 7:49 am ad1c9bdddf
According to Brigham and Houston (2007), there are two new dimensions of risk:
(1) Business risk, which is the riskiness of the firm's assets if it uses no debt.
(2) Financial risk, which is the additional risk placed on the common stockholders as a result of using debt (p. ...
Business operation is a risky business. A business owner must accept a level of risk such as it may not succeed and not recover the investment. There are two significant risks factors: business risk and financial risk. This solution discusses both.