Most firms are able to use _________ percent debt in their capital structure without exceeding norms acceptable to creditors and investors.

Question

Quizplus · Accepted Answer

While the optimal proportion of debt in a firm's capital structure may vary based on factors such as industry and business risk, a general rule of thumb is that most firms can use up to 40-70% debt without exceeding acceptable norms to creditors and investors. This range allows firms to benefit from the tax advantages of debt while maintaining a reasonable level of risk.

Most Firms Are Able to Use _________ Percent Debt in Their