According to the Signaling Theory of Capital Structure,firms First Use

question 29

True/False

According to the signaling theory of capital structure,firms first use common equity for their capital,then use debt if and only if they can raise no more equity on "reasonable" terms.This occurs because the use of debt financing signals to investors that the firm's managers think that the future does not look good.

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Definitions:

Genetic Abnormalities

Variations from the normal sequence in the genetic material of an organism, which may or may not lead to disease or conditions.

Psychopathology

Investigating mental illnesses, covering their manifestations, reasons, and healing approaches.

Cross-Sectional Study

A research method that analyzes data from a population, or a representative subset, at a specific point in time.

Longitudinal Study

A research method that involves repeatedly observing the same subjects over a period, often years or decades, to track changes.