Final answer:
The statement is true. Firms with predictable cash-flow patterns should assume relatively low levels of risk.
Step-by-step explanation:
Firms with predictable cash-flow patterns should assume relatively low levels of risk. This statement is True.
When a firm has a record of earning significant revenues and profits, it demonstrates stability and financial health. Consequently, such firms can make credible promises to pay interest and are more likely to borrow money from banks or issue bonds.
Having access to financial capital through borrowing methods reduces the risk exposure of firms during tough times, ensuring their survival until better times arrive. Therefore, firms with predictable cash-flow patterns should assume relatively low levels of risk.