A Valuable Firm Will Tend To

question 34

Multiple Choice

A valuable firm will tend to:

• A)see its stock price increase if it issues debt beyond its optimal debt level.
• B)issue more debt than a less valuable firm of comparable size.
• C)reduce its debt level as a positive signal for the firm.
• D)issue debt,but only on a temporary basis purely to fool investors regarding the firm's value.
• E)see its stock price increase when it announces an exchange offer that decreases its leverage.

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