Equity monitoring costs are lower in the United States than

Equity monitoring costs are lower in the United States than in other countries because:

U.S. companies must comply with relatively stringent audit requirements.

the corporate debt in U.S. companies consists of bank loans.

U.S. banks are more directly involved with the debtor firms\' affairs.

capital gains are not taxed in the U.S. unless they exceed some minimum amount.

dividends in the U.S. are tax-exempt.

Solution

Correct option is > U.S. companies must comply with relatively stringent audit requirements.

Corporation is US are asked to produce quarterly reports, pay quarterly dividends and they follow stringent audit requirements hence, the equity monitoring cost is low in US.