Studies have found that firms with large investments in tangible assets tend to have: High leverage.
What are considered tangible assets?
Tangible assets are defines as physical and measurable assets that are used in a company's operations. Assets like property, plant, and equipment, are called tangible assets. Tangible assets form the backbone of a company's business by giving the means by which companies can produce their goods and services.
Why are tangible assets important?
Tangible assets are crucial to businesses as they represent much of the company's worth. When a company can represent this worth with good documentation, the assets can serve as collateral for loans and make it easier for companies to get the financing funding they need to continue operations.
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