A company with low financial leverage,large reserve borrowing capacity and few profitable investment opportunities is likely to:

Question

Quizplus · Accepted Answer

A company with low financial leverage and large reserve borrowing capacity means that it has a low level of debt and is able to access financing if needed. This also indicates that the company may not have many profitable investment opportunities, which means there is potential for the company to generate larger free cash flows that can be used for other purposes such as paying dividends, share buybacks, or investing in new projects. A high cost of capital or cost of debt would be unlikely in this scenario since the company has low leverage and access to reserves.

A Company with Low Financial Leverage,large Reserve Borrowing Capacity and Few