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Firms that typically have a high degree of R&D intensity and growth opportunities typically a lower leverage ratio (all else equal). True False

User Samfrances
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Final answer:

Firms with high R&D intensity and growth opportunities typically have a lower leverage ratio.

Step-by-step explanation:

The statement is true. Firms that typically have a high degree of R&D intensity and growth opportunities tend to have a lower leverage ratio, all else equal. A high degree of R&D intensity implies that the firm invests a significant amount of resources and capital into research and development activities. These investments typically have a high degree of uncertainty and risk, which can make lenders and investors more hesitant to provide financing. As a result, firms with high R&D intensity and growth opportunities often have to rely more on internal financing sources and have a lower leverage ratio.

User Dimid
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