Most firms are able to use 60% to 70% debt in their capital structure without exceeding norms acceptable to most creditors and investors.
Lenders and investors generally become concerned when debt exceeds 50% of the overall capital structure.

Question

Quizplus · Accepted Answer

Lenders and investors generally become concerned when debt exceeds 50% of the overall capital structure, but most firms are able to use 30% to 40% debt in their capital structure without exceeding norms acceptable to most creditors and investors.

Most Firms Are Able to Use 60% to 70% Debt