Which of the Following Is Not Empirically True When Formulating

question 57

Multiple Choice

Which of the following is not empirically true when formulating capital structure policy?

• A) Some firms use no debt.
• B) Most corporations have low debt-asset ratios.
• C) There are no differences in the capital-structure of different industries.
• D) Debt levels across industries vary widely.
• E) Debt ratios in most countries are considerably less than 100%.

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Definitions:

Present Value

The today's value of future money or cash flows, determined by applying a chosen rate of return.

Market Value

The current price at which an asset or service can be bought or sold in an open market.

Future Earnings

The projected income a company or individual is expected to generate in upcoming periods.

Investing Human Capital

The process of improving the workforce's skills and knowledge through education, training, and experience to enhance productivity and economic value.