Which of the following firms can sustain a higher debt ratio?

Question

Quizplus · Accepted Answer

An insurance firm with stable sales in an advanced economy can sustain a higher debt ratio because it has reliable and predictable revenue streams. This allows the firm to make regular interest payments and repay principal without significant stress on the company's cash flows or financial stability. In comparison, the other options have higher risk profiles due to factors such as volatility in product demand, economic instability, and limited access to credit markets.

Which of the Following Firms Can Sustain a Higher Debt