Final answer:
The drug industry tends to have low leverage as it can finance its operations through significant cash flows from patented drugs, unlike industries like airlines that require high capital expenditures leading to higher leverage. (Option D).
Step-by-step explanation:
The question requires us to identify which of the listed industries tends to have low financial leverage. Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new assets will exceed the cost of borrowing.
In this case, the drug industry (a) tends to have lower leverage compared to the other industries. This is because drug companies often have significant cash flows from their operations, especially when they own patents to major drugs. This allows them to finance their operations without borrowing heavily.
On the other hand, industries such as airlines (d) typically have high leverage due to the significant capital expenditures needed for purchasing aircraft and maintaining their fleets in addition to fluctuating demand and sensitivity to economic cycles.