Problem 5 One recommendation in the chapter is that companies with promising investment opportunities should strive to maintain a conservative capital structure Yet many promising small businesses are heavily indebted Why should most companies with promising investment opportunities strive to maintain conservative capital structures Why do you suppose many promising small businesses fail to follow this recommendation

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Question: Problem 5: One recommendation in the chapter is that companies with promising investment opportunities should strive to maintain a conservative capital structure. Yet many promising

Problem 5: One recommendation in the chapter is that companies with promising investment opportunities should strive to maintain a conservative capital structure. Yet many promising small businesses are heavily indebted.

Why should most companies with promising investment opportunities strive to maintain conservative capital structures?
Why do you suppose many promising small businesses fail to follow this recommendation?

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