What is financial flexibility? A. The ability to buy and sell securities listed

Question

What is financial flexibility?

A. The ability to buy and sell securities listed in the stock exchanges.

B.   The ability to pay off the debt on time or earlier.

             C. The ability to raise cash when needed by borrowing or issuing stock.

D. The fact that dividends do not always need to be paid, while interest does.

A. The ability to buy and sell securities listed in the stock exchanges.

B.   The ability to pay off the debt on time or earlier.

             C. The ability to raise cash when needed by borrowing or issuing stock.

D. The fact that dividends do not always need to be paid, while interest does.

Explanation / Answer

The correct answer is option C .

Financial flexibility is ability of firm to raise capital from various sources of finance. Like borrow or issue of stock. Company can choose any source based on his capital structure. ... Financial flexibility describe company's ability to react unexpected expenses and investment opportunities.Financial flexibility is usually assessed by examining company's use of leverage as well as Cash holding

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