Which of the following statements is correct?
A) There have been no significant observed differences in the capital structures of U.S.corporations in comparison to their German and Japanese counterparts.
B) Different countries use essentially the same international accounting conventions with respect to reporting assets on a historical versus replacement cost basis.
C) An analysis of both bankruptcy and equity reporting costs leads to the conclusion that U.S.firms should have more equity and less debt than firms in Japan and Germany.
D) Equity monitoring costs are higher in the United States than in Japan and Germany.
E) Debt monitoring costs are probably lower in the United States than in Japan and Germany.

Question

Quizplus · Accepted Answer

U.S. firms tend to have more equity and less debt compared to firms in Japan and Germany due to differences in bankruptcy and equity reporting costs.

Which of the Following Statements Is Correct