Use Figure 15.7
which I have attached which shows the net debt-to-enterprise value ratio for
some select industries to answer both parts of the question.
Firms in the real estate investment trusts
(REITs), airlines, electric utilities, and paper products industries tend to
have high leverage. Explain why firms in these industries would prefer to have
high leverage?
Firms in the computer hardware, footwear,
apparel and luxury goods, and data processing industries tend to have low
leverage. Explain why firms in these industries would prefer to have low
leverage?
Include some news from an article that is less
than a year old that is applicable to this discussion.
