x C Observed Capital Structur x hat Do You Notice Ab X dbu.blackboard.com/webapp

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x C Observed Capital Structur x hat Do You Notice Ab X dbu.blackboard.com/webapps/discussionboard/do/message?action-create&ido-create;&req; TOI YouTube f Facebook C CHegg * Indicates a required field. FORUM DESCRIPTION Refer to Table 17-3 of the textbook, copied in the next Debt as a Percentage of the Market Value of Equity and Debt (Industry Medians) High Leverage Radio and television 59.60 broadcasting stations Air transport Hotels and motels Building construction Natural gas distribution Low Leverage Electronic equipment 45.89 45.55 42.31 33.11 Educational services Drup Biological products 10.58 .53 8.93 8.79 8.05 DERNITION: Dabe is the toal of short-cerm dube and long-cerm eb. 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? MESSAGE * Subject Click Save Drat to save a draft of this message. Click Submit to submit the post. Click Cancel to

Explanation / Answer

Huge intiial investment requriring industries or mature industires have above average debt equity ratios, that is industries which foresee their ability to pay off debt through their regular income.

Yes certain industries are more likely to be highly leveraged than others

Possible reasons:
Industries which have certain cash flows or industries which are mature take more levergae and others less leverage

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