Question
Which of the following industries tend to have low leverage?
Multiple choice question.
Drugs
Airlines
Restaurants
Multiple choice question.
Drugs
Airlines
Restaurants
Answers
GPT-4o mini
Industries that tend to have low leverage typically have less debt relative to their equity. Among the options provided:
- **Drugs**: Pharmaceutical companies often have high R&D costs, but they also tend to have significant cash flows and can manage their debt levels more effectively.
- **Airlines**: The airline industry often operates with high leverage due to significant capital expenditures related to aircraft and infrastructure.
- **Restaurants**: The restaurant industry can vary widely, but many businesses within it operate with lower leverage, relying more on equity and less on debt.
Given this understanding, the industry that tends to have low leverage among the options is **Restaurants**.
- **Drugs**: Pharmaceutical companies often have high R&D costs, but they also tend to have significant cash flows and can manage their debt levels more effectively.
- **Airlines**: The airline industry often operates with high leverage due to significant capital expenditures related to aircraft and infrastructure.
- **Restaurants**: The restaurant industry can vary widely, but many businesses within it operate with lower leverage, relying more on equity and less on debt.
Given this understanding, the industry that tends to have low leverage among the options is **Restaurants**.