Which of the Following Statements Is True Regarding the Trade-Off

question 108

Multiple Choice

Which of the following statements is true regarding the trade-off theory:

• A)target debt ratios are similar among firms in the same industry.
• B)riskier firms tend to rely mostly on debt financing.
• C)riskier firms should have high target debt ratios.
• D)less risky firms ought to have a greater amount of debt financing.

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