GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A business’ financial structure should be flexible:able to adapt to fluctuating financial circumstances. If we talk about qualitiative elasticity that means:
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The amount of available resources measured in relation to access to the capital markets
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Enables the business to replace one type of capital for another
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The sensitivity of the demand of capital to changes in interest rates
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None of the above is correct
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Explanation:
Detailed explanation-1: -Free cash flow represents a company’s financial flexibility. The higher a company’s free cash flow, the more flexible that company is when investment opportunities such as strategic acquisitions present themselves.
Detailed explanation-2: -As the name suggests, flexible capital is a customized source of funding which helps companies achieve their fund-raising objectives by bridging the gap between traditional debt and equity, thus putting minimal strain on their cash flows.
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