According to the Signaling Theory to Explain Differences in Firms

question 44

True/False

According to the signaling theory to explain differences in firms' capital structures, an announcement of a new stock issue by a mature, seasoned firm that has numerous financing alternatives generally is seen as a signal that the its future prospects are very positive. 

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Definitions:

Exports

Products or services traded or sold from one nation to another.

Imports

Purchased goods or services brought into one country from another.

Financial Account

A component of the balance of payments that records transactions of financial assets between a country and the rest of the world.

Current Account Balance

The sum of a country's net income from foreign trade, net current transfers, and net income, often indicating the country's economic health.