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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Financial Risk
Hy sir,
what is the difference between financial risk and financial distress risk?
Financial distress risk is the risk of going bankrupt (which M&M ignore).
Financial risk is the risk to shareholders resulting from the fixed interest payments on the best borrowing (which is what M&M theories are concerned about).
Thank you for your help 🙂
You are welcome 🙂