Rank the following in order of their importance (from most important to least important)in explaining capital structure changes over 5-year time horizons for publicly traded U.S. firms
From 1964 to 2003:
I. Net short-term debt issuing activity
II. Net long-term debt issuing activity
III. Dividend payments
IV. Net equity issuing activity
A)IV, II, I, III
B)II, IV, I, III
C)II, I, IV, III
D)IV, III, II, I

Question

Quizplus · Accepted Answer

Net long-term debt issuing activity (II) and net equity issuing activity (IV) are typically the most significant factors in capital structure changes over a 5-year horizon, as firms adjust their leverage and equity levels. Short-term debt (I) and dividend payments (III) are generally less impactful in this context.

Rank the Following in Order of Their Importance (From Most