Integrated Systems Solutions Inc. (ISS) is a technology company that sells software to companies in the building construction industry. The company’s assets consist mostly of intangible assets. Although the company is profitable, revenue growth and earnings growth have been slowing in recent years. The company’s business model is a pay-peruse model, and given the cyclical nature of the construction industry, the company’s revenues and earnings vary considerably over the business cycle.

Describe two factors that would point to ISS having a relatively high cost of borrowing and low proportion of debt in its capital structure.