|
Preparation
Read “Financial
Risk & Capital Structure.”
Purpose of Lecture
Debt is a highly useful and inexpensive (at least relative to
equity) source of financing for businesses, but as the level of
debt increases, so does the level of risk. This is known as the
principle of increasing risk. To manage total risk, a business
needs to manage business/operational risk as well as debt use
or leverage.
Structure of Presentation
The principle of increasing risk is introduced, an example is
given and the need for management of business/operational risk
as well as financial risk is discussed.
Other References
“Managing Your Interest Rate Risk.” Dave Kohl
and Troy Wilson. Northwest Farm Credit Services. Spokane,
WA. Phone the marketing department at 509-340-5400 to order.
|
