Introduction of the term Risk Principle
Give a brief introduction of the term Risk Principle?
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Risk Principle : this principle deals with the capital structure that must not admit high risk. If company issue big amount of preference shares out of the earnings of the company then fewer amounts will be left for equity shareholders as dividend is paid subsequent to the preference shares.
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Opportunity Cost:Whenever you select a particular alternative, the next best alternative should be given up. For illustration, when you desire to watch cricket highlights in T.V., you should
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