Which of the Following Statements Concerning Capital Structures Around the World

question 29

Multiple Choice

Which of the following statements concerning capital structures around the world is correct?

• A)There have been no significant observed differences between the capital structures of U.S. corporations and their German and Japanese counterparts.
• B)All countries use essentially the same international accounting conventions with respect to reporting assets on foreign companies' financial statements.
• C)Differences among countries in both bankruptcy costs 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 lower in the United States than in Japan and Germany.

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Definitions:

Commercial Speech

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First Amendment

A part of the U.S. Constitution that protects freedoms including speech, religion, press, assembly, and petition.

Protection

Measures or policies implemented to guard against harm or loss in a legal, financial, or security context.

Takings Clause

A provision in the Fifth Amendment of the U.S. Constitution that prohibits the government from taking private property for public use without just compensation.