Final answer:
Among the given options, drug companies (pharmaceuticals) typically operate with low leverage due to their considerable cash flows and potentially less need for debt financing, as compared to industries with high fixed costs such as airlines.
Step-by-step explanation:
The question pertains to the financial structure of various industries, specifically inquiring which of the given industries typically operates with low leverage. Leverage, in this context, refers to the amount of debt a company uses to finance its assets. A company with low leverage would have a smaller proportion of debt in its capital structure compared to equity.
Option A) Drugs - Pharmaceutical companies often require significant investment in research and development. However, large, well-established pharmaceutical companies can have significant cash flows and might not need to rely heavily on debt, potentially maintaining low leverage ratios.
Option B) Restaurants - The restaurant industry can be quite variable. While some smaller or independent restaurants may operate with low leverage, rapidly expanding chains or those with high capital costs might take on more debt.
Option C) Computers - Technology and computer firms often have high development costs, but many, especially larger firms with successful products, generate significant cash flows that allow for low to moderate leverage.
Option D) Airlines - The airline industry is known for its high fixed costs and significant investment in aircraft, which often results in higher levels of debt and thus high leverage.
Considering the above, drug companies (Option A) tend to have a low leverage compared to the other industries listed, particularly when considering large, established companies in the sector.