the trade-off approach has been completely successful in explaining differences between firms and industries in their actual capital structures. group of answer choices
true
false

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20-12-2022
Business

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the trade-off approach has been completely successful in explaining differences between firms and industries in their actual capital structures. group of answer choices
true
false

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sapanpandit sapanpandit · Answer 1 · 2022-12-24T22:42:02-05:00

True, The trade-off approach has proved totally successful at illuminating variations in enterprises' and sectors' actual capital structures.

A corporation decides how much debt financing and how much equity financing to use by weighing the costs and advantages, according to the trade-off theory of capital structure. The original formulation of the theory dates back to Kraus and Litzenberger.

A corporation can pick its capital structure with the use of three financial principles: the net income approach, static trade-off theory, and pecking order theory. Depending on the type of capital structure the company aspires to, each is a consideration in the decision-making process. However, it has been empirically found that the pecking order theory is most frequently utilised to determine the capital structure of a corporation.

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the trade-off approach has been completely successful in explaining differences between firms and industries in their actual capital structures. group of answer choices true false

Answer :

Other Questions

the trade-off approach has been completely successful in explaining differences between firms and industries in their actual capital structures. group of answer choices
true
false