finance

The M& M capital structure theories in chapters 15 and 21 persuasively argue that the optimal debt is not a 0.0 % debt to equity ratio (i.e., no debt).

Table 15-1 (page 591 of text) shows that, consistent with M&M theories, the average long-run debt to equity ratio in many different industries ranges from 11% for technology to 79% for utilities.

Yet some technology firms, such as Facebook, google, and Apple, do not use any long-term debt or almost 0.0% LT debt.

Please explain whether it makes financial sense for such firms to use no debt.

You would want to use your understanding of capital structure material in chapters 15 and 21, especially signaling and asymmetric information theories, in your answers. Limit your answers to no more than ten (10) sentences.