Under which of the following situations a company is not likely to issue equity capital ........

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Under which of the following situations a company is not likely to issue equity capital?

When the debt service coverage ratio is high.

When the interest coverage ratio is high.

When the cost of debt capital is low.

All of the above

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Explanation:

- Option 1: When the debt service coverage ratio is high.

- This ratio measures a company's ability to service its debt. If it's high, the company efficiently covers its debt obligations, reducing the immediate need to issue equity.

- Option 2: When the interest coverage ratio is high.

- This measures the company’s ability to pay interest on its debt. A high ratio indicates strong capability, often making further equity less necessary.

- Option 3: When the cost of debt capital is low.

- If debt is cheap, companies may prefer borrowing over issuing equity, to maintain control and potentially lower the average cost of capital.

- Option 4: All of the above.

- Companies are likely to avoid issuing equity in each of these scenarios as debt is manageable and/or cheaper.