Which of the following statements concerning the capital structures of Japanese companies is correct?
A)Companies in Japan are financed nearly entirely with equity.
B)Companies in Japan use greater proportions of debt than companies in most other countries.
C)The capital structures of most Japanese companies contain little debt that is issued in Japan; that is, most firms are financed with foreign debt.
D)Debt monitoring costs are extremely high in Japan.
E)Companies in Japan raise most of their funds using publicly-issued corporate bonds.

Question

Quizplus · Accepted Answer

Companies in Japan tend to use greater proportions of debt than companies in most other countries. However, the debt is usually short-term and comes from banks rather than from public bond markets. Japanese companies also place a strong emphasis on maintaining close relationships with their banks to ensure stable funding sources.

Which of the Following Statements Concerning the Capital Structures of Japanese