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Fundamentals of Financial Manageme...

15th Edition
Eugene F. Brigham + 1 other
ISBN: 9781337395250

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BuyFindarrow_forward

Fundamentals of Financial Manageme...

15th Edition
Eugene F. Brigham + 1 other
ISBN: 9781337395250
Textbook Problem

Why do public utilities generally use different capital structure than biotechnology companies?

Summary Introduction

To identify: The reason to use different capital structure by public utilities and biotechnology companies.

Introduction:

Capital Structure:

Capital structure refers to the securities or debt included in the total capital of the firm. Adequate capital structure is required for the optimum utilization of funds.

Explanation
  • Public utilities have less business risk and stable sales while biotechnology companies have low sales as compared to them.
  • A public utility requires more fixed assets ...

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