Observed Capital Structures. Refer to the observed capital structures given in Table 13.5 of the…


Observed Excellent Structures. Refer to the observed excellent structures abandoned in Table 13.5 of the citation. What do you regard environing the types of industries after a while reference to their medium debt-equity ratios" Are eel1ain types of industries more slight 10 be very-much leveraged than others"! What are some feasible reasons for this observed segmentation? Do the exempt results and tax truth of the firms enact a role? How environing their advenient rights prospects? Explain.

Capital structures for U.S. industries

Industry

Ratio of Debt to Total Capital’

Ratio of Debt

to Equity

Number of

Companies

SIC

Code

Representative Companies

Drugs

6.39

6.82

209

283

Merck, Pfizer

Petroleum refining

22.3

28.7

15

291

ExxonMobil, ChevronTexaco

Steel

34.68

53.11

22

331

United States Steel, Nucor

Computers

10.68

11.96

99

357

Dell, Hewlett-Packard

Electronic components

6.97

7.49

121

367

Intel, Texas Instruments

Motor vehicles

26.36

35.79

39

371

General Motors, Ford

Airlines

64.35

180.48

19

451

Delta, Southwest

Telephone

39.83

66.38

46

481

Verizon. AT&T

Cable and pay television

37.26

61.89

8

484

Comcast, DirecTV

Department stores

46.13

85.63

9

531

Kohl"s, Neiman-Marcus

Variety stores

8.93

9.81

14

533

Wal-Mart, Target

Grocery stores

39.92

66.46

18

541

Kroger, Safeway

Consumer electronics

9.67

10.71

10

573

Best Buy, Circuit City

Eating and drinking places

27

36.98

65

581

McDonald"s, Wendy"s

Banks

42.39

73.59

340

602

Bank of America, Wells Fargo

Brokers

29.54

42.77

28

621

Merrill Lynch, T.D. Ameritrade