Why do firms in mature industries tend to have higher gearing ratios?
A) Bankers are averse to lending to industries making risky new products
B) Mature firms have significant assets, long financial track records, and can obtain more debt to lower their overall cost of capital than firms in growth industries
C) Bankers have actually heard of the names of these firms before studying detailed borrowing proposals
D) All of the above
Correct Answer:
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