The M&M capital structure theories persuasively argue that the optimal long-term debt is not 0.0% debt due to the tax shield benefit of debt. The table below shows that, consistent with M&M theories, the average long-run debt to equity ratio in many different industries is positive (e.g., 55% for hotels, 86% for industrial companies, and only 9% for the tech sector). Yet many large technology firms, such as Facebook, Alphabet (Google), and Apple, do not use any long-term debt to finance their operations and new investments.

Please explain whether it makes financial sense for big technology firms to use no debt and give up the tax shield benefit of debt. Use terms like R&D under asymmetric information theory, financial distress costs, debt tax shield, and especially signaling theory.

Long-Term Debt-to-Equity Ratios for Business Sectors, Selected Sub-Sectors, and Selected Firms Long-Term Debt-to-Equity Ratio Company Sub-Sector Sector Name of Sector 38% 55% 19% 5% Cyclical Consumer Goods and Services Selected Sub-Sectors in Cyclical Consumer Goods: Hotels, Motels & Cruise Lines Apparel and Accessories Retailers (A&A): Selected Companies in A&A Foot Locker (FL) Tiffany & Co. (TIF) Utilities Industrials Telecommunications Services Financials Energy Materials 27% 107% 86% 74% 33% 31% 24% Health Care 13% 9% Technology Non-Cyclical Goods and Services 7% Source: For updates on a company's ratio, go to www.reuters.com and enter the ticker symbol for a stock quote. Click the Financials tab for updates on company and sector ratios