Which of the following statements is true of the capital structure of companies in Germany?
A)Companies in Germany use the lowest proportion of debt of industrialized countries.
B)Companies in Germany use only equity to finance their projects.
C)The corporate debt raised by companies in Germany mostly consists of publicly issued bonds.
D)Debt monitoring costs are high in Germany because of stringent audit requirements.
E)Companies in Germany raise most of their corporate debt through bank loans.

Question

Quizplus · Accepted Answer

Companies in Germany raise most of their corporate debt through bank loans, which make up a significant portion of their capital structure. This is because of the close relationship between German companies and banks, resulting in easier access to debt financing.

Which of the Following Statements Is True of the Capital