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aryaelfkind aryaelfkind
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8 months ago
Which statement concerning capital structure theory is correct?


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According to signalling theory, a stock issue sets off a positive signal, while using debt is a negative signal.



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Signalling theory suggests that a firm should try to use more debt in “normal” times than the MM trade-off theory would suggest.



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Signalling theory suggestsfirmsshouldinnormaltimesmaintainreserveborrowing capacity thatcanbe usedif anespecially good investmentopportunitycomesalong.



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Many of the corporate takeovers and leveraged buyouts in recent years were designed to improve efficiency by increasing the cash flow available to managers.

Textbook 
Financial Management: Theory and Practice

Financial Management: Theory and Practice


Edition: 4th
Authors:
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clarkh7839clarkh7839
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8 months ago
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