User:Hjiang2/sandbox

= Event Risk =

What is an event risk?

Event risk usually refers to unpredictable upcoming events that have a negative impact on companies, institutions and security.

Reputation risk- if so, this may have a negative impact on the company.

Injury risk- company employees volunteers and participants may be injured in potentially dangerous events, many of which are high-risk activities, such as bad amusement park equipment, car accidents, fireworks, etc.

Financial risk- when a company operates or invests, it needs a lot of money from financial and other investors' support. However, the event may also be cancelled due to weather or other natural irresistible reasons.

Why do we need to know the event risk?

The value of a company is reflected in many factors that management can anticipate and control. However, many events many not be within the control of management and there are certain risks. If these incidents are not handled properly, they are likely to affect the performance of the whole company, like stocks and bonds. Although it is impossible to predict these risks accurately, before investing in a company, considering event risk can be very helpful to the company in terms of stocks and financial performance and stocks.

Some examples

Event risk may arise from the company's own actions, such as restructuring or acquisition. It may also come from outside corporate behavior, such as acquisitions or leveraged buyouts (LBO) events, and may even be completely independent of the company's operations, such as natural disasters or computer viruses. The September 11, 2001 terrorist attack in New York was a great event risk. It caused huge losses to many large organizations, such as airlines and financial services, and disrupted normal business activities.

The ways to control even risk

Companies can buy insurance to avoid or reduce losses, such as fires, earthquakes and other natural factors. But other incidents may not be able to buy insurance, such as terrorist attacks, because insurance companies do not provide insurance. Usually, companies can protect themselves from risks through financial services such as act of God bonds, swaps, options and debt collateral. Another way to control event risk is through acquisitions or restructuring, such as mergers or acquisitions or leveraged buyouts. These approaches may require companies to take on new debt and give them higher interest rates, but they may have difficulties repaying some small companies. Companies also face regulatory risks, as new laws may require companies to pay a huge price for changing business models. For example, the new law requires people to ban smoking, and the cigarette sales service industry will face instant bankruptcy.