Which of the following is not empirically true when formulating capital structure policy?
A) Some firms use no debt.
B) Most corporations have low debt-asset ratios.
C) There are no differences in the capital-structure of different industries.
D) Debt levels across industries vary widely.
E) Debt ratios in most countries are considerably less than 100%.

Question

Quizplus · Accepted Answer

Empirical evidence suggests that there are indeed differences in the capital structure of different industries, with some industries such as utilities and telecommunications having more debt in their capital structure compared to industries like software and biotechnology. Therefore, choice C is not empirically true.

Which of the Following Is Not Empirically True When Formulating