All of the following are reasons why a firm may face capital rationing except:
A)reluctant to issue additional debt
B)the discount rate is too high
C)lacks the managerial resources
D)restrictive covenants that limit borrowing

Question

Quizplus · Accepted Answer

The statement "the discount rate is too high" is not a reason why a firm may face capital rationing. The discount rate is a rate used to determine the present value of future cash flows and is not directly related to a firm's ability to raise capital. The other answer choices can all be reasons why a firm faces capital rationing.

All of the Following Are Reasons Why a Firm May