Why do public utilities typically have capital structures with about 5
QUESTION
Why do public utilities typically have capital structures with about 50 percent debt, whereas major oil companies average about 25 percent debt in their capital structures?
ich the financial institutions are more willing to extend loans to public utilities. On the other hand the oil companies re considered to be risky as there performance is affected by a number of uncontrollable environmental factors due to which financial institutions are restrictive in their approach to extend loans.
ANSWER:
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