One of the Implications of Signaling Theory for Capital Structure

question 4

True/False

One of the implications of signaling theory for capital structure decisions is that firms should normally seek to maintain a reserve borrowing capacity.

---

Definitions:

Revolutionaries

Individuals who actively engage in, or advocate for, profound political change, often through the overthrow of an existing government or social order.

Ben Franklin

A leading Founding Father of the United States, known for his contributions as a statesman, author, printer, and scientist among other roles.

West Indies' Trade

Trade activities that involve the exchange of goods and services between the West Indies and other parts of the world.

Liberalized Divorce Laws

Regulations that have been relaxed to allow divorces to be obtained more easily, often reflecting changes in society's attitudes towards marriage.