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MArishka [77]
2 years ago
10

As leverage rises, risk ______ because a negative event increases the chance of __________.

Social Studies
1 answer:
steposvetlana [31]2 years ago
8 0

As leverage rises, risk Rises because a negative event increases the prospect of Bankruptcy

<h3>What sort of risk is leverage?</h3>

The biggest risk that arises from high financial leverage occurs when a company's return on ROA does not exceed the interest on the loan, which greatly diminishes a company's return on equity and profitability.

Why Is Leverage Risky?

Leverage extends an investor's exposure to a market and may also put them into a risky situation. this is often particularly true for an investor who is purchasing more than they can afford

Learn more about leverage risk:

brainly.com/question/15392754

#SPJ4

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