In general,the capital structures used by U.S.firms:
A)tend to overweigh debt in relation to equity.
B)generally result in debt-equity ratios between 0.45 and 0.60.
C)are fairly standard for all SIC codes.
D)tend to be those which maximize the use of the firm's available tax shelters.
E)vary significantly across industries.

Question

Quizplus · Accepted Answer

Capital structures vary significantly across industries. Different industries have varying levels of capital intensity, growth opportunities, and risk profiles, which affects the optimal mix of debt and equity financing. For example, industries such as utilities and telecommunications tend to have higher debt ratios due to their stable cash flows and high capital requirements. In contrast, technology startups may have lower debt ratios due to their high growth potential and uncertain revenue streams.

In General,the Capital Structures Used by U.S.firms