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:

Ownership

The legal right or title to control and use property, assets, or resources, including the responsibilities and benefits that come with it.

Sales Response Function

Relates the expense of the marketing effort to the marketing results obtained.

U-shaped

Refers to a pattern or layout that resembles the letter “U,” often used to describe the configuration of tables, desks, or other arrangements.

S-shaped

A term often used to describe a curve or growth pattern that starts slowly, accelerates, and then slows down again, resembling the letter "S."