A firm's capacity to obtain financing as necessary is called:
A)liquidity.
B)financial slack.
C)portfolio affect.
D)leverage.

Question

Quizplus · Accepted Answer

Financial slack refers to a company's ability to obtain financing as necessary. This could include having cash reserves or access to credit lines to cover unexpected expenses or take advantage of growth opportunities. Liquidity refers more specifically to a company's ability to meet its short-term financial obligations without incurring significant losses or negative impact on operations. Leverage refers to the amount of debt a company has relative to its equity, while portfolio effect refers to the diversification benefits achieved by holding a range of assets.

A Firm's Capacity to Obtain Financing as Necessary Is Called