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Refer to Table 17-3 of the textbook, copied in the next. ...

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Finance

Refer to Table 17-3 of the textbook, copied in the next.
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?
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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 Computers Educational services Drugs Biological products 45.89 45.55 42.31 33.11 0.58 9.53 8.93 8.79 8.05 DEFINITION: Debt is the total of short-term debt and long-term debt. SOURCE: Ibbotson 2011 Cost of Copital Yearbook (Chicago: Morningstar, 2011)

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