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Basic Question 4 of 19
Capital-light businesses may have little debt in their capital structures. This is because: I. They are frequently cash flow positive from the start.
II. Their underlying assets can be bought and sold fairly easily.
III. They may not under the same pressure to pay dividends or repurchase shares.
IV. Their underlying assets tend oto retain their value regardless of who owns them.
V. The market value of the company's stock can dwarg the value of the any raised debt if the share price rises significantly.
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Learning Outcome Statements
explain factors affecting capital structure and the weighted-average cost of capital
CFA® 2024 Level I Curriculum, Volume 2, Module 6.