List and Briefly Explain at Least Two Important Reasons Why

question 55

Essay

List and briefly explain at least two important reasons why capital structures tend to differ between industries and even companies within the same industry.

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Definitions:

Self-serving Bias

The common tendency to attribute successes to personal characteristics and failures to external factors.

Situational Factors

External influences or conditions that affect decision-making, behavior, or performance in varying scenarios.

External-unstable Factor

refers to outside influences that can affect behavior or outcomes but are inconsistent and unpredictable, such as luck or chance.

Pessimistic Explanatory

A cognitive style where individuals habitually attribute negative events to stable, global, and internal causes.