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[Blaka]

The kind of business a company does affects how it should get money because different industries have different needs and risks. Some businesses, like manufacturing, need a lot of money upfront for things like machines. They might like borrowing money because it helps with taxes and keeps their own money for everyday needs.

But for industries like tech or biotech that change a lot and grow fast, it's better to sell shares to get money. That way they can fund things like new ideas without owing fixed amounts from borrowing. These industries care more about being flexible and quick than getting tax benefits from borrowing.

 

[Wisdom01]

The kind of industry it's operating this have effect , I believe that's why every company put into consideration a lot when they are running their business , a lot is been considered property more often times

 

[IB DD]

Industries play a role to a large extent on the capital structure of a company. A company operating in an industry that has more to do with intellectual property would naturally set it's capital structure towards equity. It is not easy for them to really push through debts as a capital structure because it doesn't have tangible things like products or machinery it can stake as collateral.

 

[kayode10]

A company's industry impacts its ideal capital structure by influencing risk levels, cash flow stability, and asset requirements. Capital-intensive industries like utilities favor higher debt due to stable revenues and tangible assets, while tech firms prefer equity to mitigate risk and support growth. Industry norms, regulatory environment, and competitive dynamics also shape optimal leverage and funding strategies.

 

[Dean1]

To determine how risky a company is, prospective equity investors look at its debt-to-equity ratio. They also compare the company's leverage ratio to that of other companies in the same industry to determine whether the company is using unusually high levels of debt in its capital structure.