A conservative financing plan involves
A) heavy reliance on debt.
B) heavy reliance on equity.
C) high degree of financial leverage.
D) high degree of combined leverage.

Question

Quizplus · Accepted Answer

A conservative financing plan involves a heavy reliance on equity, which means that the company is more likely to use retained earnings or issue new shares to raise capital instead of taking on a lot of debt. This approach typically results in a lower financial risk and more stable cash flows, as well as less pressure to meet debt repayment obligations.

A Conservative Financing Plan Involves