In general,the capital structures of U.S.firms:
A)tend to overweight debt in relation to equity.
B)employ less debt when the firm requires large amounts of tangible assets.
C)are constant over time on a firm-by-firm basis.
D)tend to be those that maximize the use of each firm's available tax shelters.
E)vary significantly across industries.

Question

Quizplus · Accepted Answer

The capital structures of U.S. firms vary significantly across industries. Factors such as industry norms, market conditions, and business risk affect the debt-to-equity ratio of a firm. Some industries such as utilities, real estate, and financial services tend to have high debt ratios, while others like technology and healthcare have lower ratios. Therefore, it is not accurate to say that the capital structures of U.S. firms tend to overweight debt in relation to equity or are constant over time or maximize the use of tax shelters.

In General,the Capital Structures of U.S.firms