Rajan and Zingales [ "What Do We Know about Capital Structure? Some Evidence from International Data," 1995] found that leverage increases with ______.
A) the tangibility of the firm's assets
B) the presence of growth options
C) the level of profitability
D) All of the above are associated with higher leverage
E) None of the above are associated with higher leverage

Question

Quizplus · Accepted Answer

According to Rajan and Zingales, leverage increases with the tangibility of the firm's assets. They did not find a consistent relationship between leverage and the presence of growth options or level of profitability.

Rajan and Zingales [ "What Do We Know About Capital