Refer to the observed capital structures given in Table 17.3 of the text. What do you notice about the types of industries with respect to their average debt-equity ratios? Are certain types of industries more likely to be highly leveraged than others? What are some possible reasons for this observed segmentation? Do the operating results and tax history of the firms play a role? How about their future earnings prospects? Explain. 

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Table 17.3 Capital Structure Ratios for Selected U.S. Industries (averages) Debt as a Percentage of the Market Value of Equity and Debt (Industry Averages) High Leverage Homebuilding Hotel/gaming Steel 66.29 55.28 47.93 42.57 38.98 Construction supplies Environmental & waste services 17.96 Low Leverage Healthcare 14.58 products Pharmaceutical 14.09 9.63 Semiconductor 4.27 Online retail Internet software