According to a 1991 Study of the Capital Structure of Large

question 50

Multiple Choice

According to a 1991 study of the capital structure of large firms throughout the world,

• A)Germany had the highest indebtedness ratios of all the countries being studied.
• B)Firms in the U.S., the U.K., and Canada tended to use more financial debt than the firms in other countries being studied.
• C)U.S. corporations tended to have higher debt ratios than firms in other countries.
• D)Firms in the U.S., the U.K., and Canada tended to have lower debt ratios than the other four countries being studied.

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Definitions:

Merchandising Firm

A business that purchases finished goods for resale in order to make a profit, differentiating itself from manufacturing firms and service firms.

Gross Margin

The difference between sales revenue and the cost of goods sold, expressed as a percentage of sales revenue.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted; a measure of profitability.

Total Cost of Goods Sold

The sum of all costs directly involved in producing or purchasing products sold by a company during a given period.