What is meant by the concept ‘financial risk’? What is the relationship between leverage and the cost of capital? Explain. Give a critical appraisal of the (a) traditional Approach and (b) the...

What is meant by the concept ‘financial risk’? What is the relationship between leverage and the cost of capital? Explain. Give a critical appraisal of the (a) traditional Approach and (b) the Modigliani-Miller Approach to the theory of capital structure.