Refer to the observed capital structures given in Table 17.3 of the text. What do you notice
Question:
Refer to the observed capital structures given in Table 17.3 of the text. What do you notice about the types of industries with respect to their average debt-equity ratios? Are certain types of industries more likely to be highly leveraged than others? What are some possible reasons for this observed segmentation? Do the operating results and tax history of the firms play a role? How about their future earnings prospects? Explain.
Transcribed Image Text:
Table 17.3 Capital Structure Ratios for Selected U.S. Industries (averages) Debt as a Percentage of the Market Value of Equity and Debt (Industry Averages) High Leverage Homebuilding Hotel/gaming Steel 66.29 55.28 47.93 42.57 38.98 Construction supplies Environmental & waste services 17.96 Low Leverage Healthcare 14.58 products Pharmaceutical 14.09 9.63 Semiconductor 4.27 Online retail Internet software
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 70% (10 reviews)
The more capital intensive industries such as air transport tel...View the full answer
Answered By
Ali Khawaja
my expertise are as follows: financial accounting : - journal entries - financial statements including balance sheet, profit & loss account, cash flow statement & statement of changes in equity -consolidated statement of financial position. -ratio analysis -depreciation methods -accounting concepts -understanding and application of all international financial reporting standards (ifrs) -international accounting standards (ias) -etc business analysis : -business strategy -strategic choices -business processes -e-business -e-marketing -project management -finance -hrm financial management : -project appraisal -capital budgeting -net present value (npv) -internal rate of return (irr) -net present value(npv) -payback period -strategic position -strategic choices -information technology -project management -finance -human resource management auditing: -internal audit -external audit -substantive procedures -analytic procedures -designing and assessment of internal controls -developing the flow charts & data flow diagrams -audit reports -engagement letter -materiality economics: -micro -macro -game theory -econometric -mathematical application in economics -empirical macroeconomics -international trade -international political economy -monetary theory and policy -public economics ,business law, and all regarding commerce
4.00+
1+ Reviews
10+ Question Solved
Related Book For
Corporate Finance
ISBN: 978-1259918940
12th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
Question Posted:
Students also viewed these Business questions
-
Refer to the observed capital structures given in Table 13.5 of the text. What do you notice about the types of industries with respect to their average debt-equity ratios? Are certain types of...
-
What do you notice in each well immediately after adding the potassium permanganate solution?
-
What do you notice when the bromine solution is stirred with each compound?
-
1. Construct a simple pendulum starting with 20 cm length. 2. Hang the pendulum as pictures in one of the two methods shown above. 3. Using the protractor, displace the pendulum 10 degrees from the...
-
Calculate the standard enthalpy change for the reaction 2Al(s) + Fe2O3(s) - 2Fe(s) + Al2O3(s) given that 2Al(s) +3O2(g)- Al2O3(s) n_-1669 - F603(s) .8 mol 2Fe(s) + O2(g) -MR00-822.2 kJ/mol 2(g)
-
A small distillation column with a partial reboiler, a total condenser, and a liquid-liquid separator is separating \(100.0 \mathrm{kmol} / \mathrm{h}\) of saturated liquid feed that is \(19.0...
-
What discount rate should be used when lessees perform lease analyses? (Lo7)
-
The City of Manhattan, Kansas, prepares an annual Budget Book, a comprehensive document that includes a citywide budget, as well as departmental budgets. The city has received the GFOA Distinguished...
-
Find the particular solution for the initial value problem. dy/dx=(y2)^2 e^ x5; y(5)=3
-
Do interruptions while you are working reduce your productivity? According to a University of California-Irvine study, businesspeople are interrupted at the rate of approximately 5 times per hour...
-
Fountain Corporations economists estimate that a good business environment and a bad business environment are equally likely for the coming year. The managers of the company must choose between two...
-
Edwards Construction currently has debt outstanding with a market value of $95,000 and a cost of 9 percent. The company has EBIT of $8,550 that is expected to continue in perpetuity. Assume there are...
-
The Allied Group is considering two investments. The first investment involves a packaging machine, which can be used to package garments for shipping orders to customers. The second possible...
-
Orange Incorporated, headquartered in Cupertino, California, designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories, and sells a variety of related...
-
Price Quantity (c) Price Quantity (a) Price Quantity Demand Curve (leftward) Demand Curve (rightward) (b) (Figure 3.1) In the market for wheat, which panel best describes what should happen if the...
-
For the gear train shown, the diameters of the three solid shafts are: dAB= 20 mm dcD = 25 mm dEF= 40 mm Knowing that for each shaft the allowable shearing stress is 58 MPa, determine the largest...
-
Kaumajet Factory produces two products: table lamps and desk lamps. It has two separate departments: Fabrication and Assembly. The factory overhead budget for the Fabrication Department is $550,000,...
-
An Australian firm has net receivables of 200,000 SGD in three-months' time as compensation for work undertaken. Current spot rate is AUD/SGD 0.9819/0.9855 Interest rates in Singapore are currently...
-
The expected annual maintenance expense for a new piece of equipment is $10,000. This is Alternative A. Alternatively, it is possible to perform the maintenance every fifth year at a cost of $50,000...
-
Calculate I, , and a for a 0.0175 m solution of Na 3 PO 4 at 298 K. Assume complete dissociation. How confident are you that your calculated results will agree with experimental results?
-
Suppose you purchase a 30-year, zero-coupon bond with a yield to maturity of 6%. You hold the bond for five years before selling it. a. If the bonds yield to maturity is 6% when you sell it, what is...
-
The following table summarizes the yields to maturity on several one-year, zero-coupon securities: Security Yield (%) Treasury 3.1 AAA corporate 3.2 BBB corporate 4.2 B corporate 4.9 a. What is the...
-
Andrew Industries is contemplating issuing a 30-year bond with a coupon rate of 7% (annual coupon payments) and a face value of $1000. Andrew believes it can get a rating of A from Standard & Poors....
-
The budget director of Heather's Florist has prepared the following sales budget. The company had $ 2 1 0 , 0 0 0 in accounts receivable on July 1 . Heather's Florist normally collects 1 0 0 percent...
-
Research Problem 1 . Charlene and Alton Dutro had lived in their home for two and onehalf years when they decided to enlarge and remodel the house. However, their architect advised them that more...
-
A ) Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and...
Study smarter with the SolutionInn App