Which of the following is an important reason why firms, Ask an Expert

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Which of the following is an important reason why firms value using at least some debt in their capital structure?

a) Issuing bonds triggers analysis by the ratings agencies, which then produce and publish their perspectives on the financial health of the firm and the quality of the bonds.

b) Most large, public corporations are required by shareholders to have a certain amount of debt in their capital structure.

c) Interest on bonds is paid just after taxes, which keeps operating income higher than it otherwise would be.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92820291

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