Which of the following statement is correct, related to fixed charges like interest on debt?

CS Executive · Financial and Strategic Management · PYQS · June 2021
Which of the following statement is correct, related to fixed charges like interest on debt?
(A) Higher the fixed charges, greater the risk
(B) Higher the fixed charges, lower the risk
(C) Higher the fixed charges, no change in the risk
(D) Higher the fixed charges, risk may either be lower or higher

Answer & Explanation:

Correct Answer: Option (A)

Official answer key: (A).

Topics: Financial Management

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