Which of the following is correct?
A) Generally,debt to total assets ratios do not vary much among different industries although they do vary for firms within a particular industry.
B) Utilities generally have very high common equity ratios due to their need for vast amounts of equity supported capital.
C) The drug industry has a high debt to common equity ratio because their earnings are very stable and thus,can support the large interest costs associated with higher debt levels.
D) Wide variations in capital structures exist between industries and also between individual firms within industries and are influenced by unique firm factors including managerial attitudes.
E) Since most stocks sell at or around their book values,using accounting values provides an accurate picture of a firm's capital structure.

Question

Quizplus · Accepted Answer

Option D correctly states that there are significant variations in capital structures between industries and individual firms within industries due to different factors, including managerial attitudes, which can influence a firm's decision regarding debt to equity ratio. The other options are either incorrect or incomplete statements.

Which of the Following Is Correct