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Unformatted text preview: ities do exist between U.S. corporations and corporations in other countries. First, the same industry patterns of capital structure
tend to be found all around the world. For example, in nearly all countries, pharmaceutical and other high-growth industrial firms tend to have lower debt ratios 438 PART 4 Long-Term Financial Decisions than do steel companies, airlines, and electric utility companies. Second, the capital structures of the largest U.S.-based multinational companies, which have
access to many different capital markets around the world, typically resemble the
capital structures of multinational companies from other countries more than
they resemble those of smaller U.S. companies. Finally, the worldwide trend is
away from reliance on banks for corporate financing and toward greater reliance
on security issuance. Over time, the differences in the capital structures of U.S.
and non-U.S. firms will probably lessen. Capital Structure Theory
Scholarly research suggests that there is an optimal capital structure range....
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This document was uploaded on 03/30/2014.
- Spring '14