Firms in Stable Industries Are Advised to Keep Debt Levels

question 58

True/False

Firms in stable industries are advised to keep debt levels very low so that shareholders, rather than creditors, receive the benefits of steady cash flows.

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Definitions:

Supernal Growth

refers to extraordinary or exceptional growth in a business or economic sector.

Dividend

A share of a firm's income allocated to its stockholders, often in cash or extra shares.

Perceivable Future

A concept referring to events or conditions that can reasonably be foreseen or predicted.

Quarterly Dividend

A payment made by a corporation to its shareholders, usually as a distribution of profits, every three months.