1. In general, the capital structures used by U.S. firms:
a. tend to overweigh debt in relation to equity.
b. are easily explained in terms of earnings volatility
c. are easily explained by analyzing the types of assets owned by the various firms.
d. tend to be those which maximize the use of the firm's available tax shelter.
e. vary significantly across industries.
2. A tenant is deciding between signing a 5 year lease and a 10 year lease. The risk associated with the tenant having to replace one 5 year lease with another 5 year lease of uncertain terms and conditions is referred to as what?
1) interlease risk
2) release risk
3) switching risk
4) discount risk