Firms Tend to Issue New Equity Rather Than New Debt

question 46

Multiple Choice

Firms tend to issue new equity rather than new debt if

• A)their stock returns are positive.
• B)their accounting financial statements present a positive picture.
• C)they have high tax obligations.
• D)all of the above.

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Definitions:

Constitutional Amendment

A formal change or addition to a constitution, often requiring a specific process of proposal and ratification by the government or the people.

Nationwide Election

An election process that occurs across an entire country to select national leaders or to decide on national policies.

Wilmot Proviso

An unsuccessful proposal in 1846 to prohibit slavery in the territory acquired by the United States at the end of the Mexican-American War.

Slave Power

A term used to describe the perceived political power held by slave owners in the United States during the 19th century, which influenced legislation and the balance of power in government.