Due primarily to concerns about financial distress,we tend to see very few firms financed with ________ or more of their capital structure as debt.
A)20%
B)35%
C)55%
D)70%

Question

Quizplus · Accepted Answer

Firms typically avoid financing with 70% or more of their capital structure as debt due to the high risk of financial distress associated with such a high level of leverage. This can lead to increased borrowing costs, reduced flexibility, and a higher risk of bankruptcy.

Due Primarily to Concerns About Financial Distress,we Tend to See