Companies that are not highly capital intensive are more risky than those that are.

Question

Quizplus · Accepted Answer

Companies that are highly capital intensive require large investments in fixed assets, such as machinery or buildings. These assets provide a level of security and stability for the company, and often require a significant amount of funding from investors or lenders. In contrast, companies that are not highly capital intensive may require less investment in fixed assets, but may be more reliant on factors such as intellectual property, brand recognition, or market demand. These factors can be more volatile and uncertain, making non-capital intensive companies more risky than their capital-intensive counterparts.

Companies That Are Not Highly Capital Intensive Are More Risky