Which of the Following Statements Is True of Capital Structures

question 53

Multiple Choice

Which of the following statements is true of capital structures around the world?

• A) There have been no significant observed differences between the capital structures of U.S. corporations and 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 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 lower in the United States than in Japan and Germany.

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Definitions:

Impermeable Barrier

A material or structure that does not allow fluids or gases to pass through it.

Epithelial

Refers to the type of tissue that lines the cavities and surfaces of blood vessels and organs throughout the body.

Muscular

Relating to or affecting the muscles in the body.

Connective

Describes tissue that supports, binds together, or separates other tissues or organs of the body.