Int. Cap Structure Question

CFA Level II
#1
  1. Which of the following statements regarding international differences in leverage is least accurate? A) Companies in Japan and France tend to have more debt in their capital structure than firms in the U.S. B) Companies in the U.S. tend to use shorter maturity debt than companies in Japan. C) Companies operating in countries with weak legal systems tend to have greater agency costs. D) Companies operating in countries that have active institutional investors tend to have less financial leverage than firms in countries with less of an institutional presence. T/G
#2

b

#3

YOu got it The correct answer was B) Companies in the U.S. tend to use shorter maturity debt than companies in Japan. Companies in developed countries tend to use more debt with longer maturities than firms in emerging markets, thus companies in the U.S. tend to use longer maturity debt than companies in Japan. I’m not sure the explanation was so great… T/G

#4

japan uses more debt and usually it’s bank related debt - loans. because of interest rates uncertainty this debt tends to be shorter term.

#5

thanks florinpop T/G

#6

B) Companies in the U.S. tend to use LONGER maturity debt than companies in Japan.