If a Firm with Favorable Prospects Sells New Shares, _____

question 66

Multiple Choice

If a firm with favorable prospects sells new shares, _____.

• A) the debt/assets ratio of the firm will increase
• B) the marginal bankruptcy-related costs of the firm will increase
• C) the retained earnings of the firm will decrease
• D) the tax payable by the firm will decrease
• E) the value of the firm's stock will decrease.

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