An MNC with stable cash flows can probably handle more debt than an MNC with erratic cash flows.

Question

Quizplus · Accepted Answer

A stable cash flow implies a steady and predictable revenue stream, which makes it easier for the company to make interest payments on its debt. On the other hand, a company with erratic cash flows may struggle to meet its debt obligations during periods of low cash flow, which increases the risk for lenders and may result in higher borrowing costs. Therefore, an MNC with stable cash flows can leverage more debt without significantly increasing its risk of default.

An MNC with Stable Cash Flows Can Probably Handle More