The Problem of Being Forced to Choose Between Foregoing a Positive

question 3

Multiple Choice

The problem of being forced to choose between foregoing a positive NPV project and seeing the share price fall because of a share issue can be overcome by maintaining:

• A)stable dividends.
• B)target leverage levels.
• C)reserve borrowing capacity.
• D)a company's debt-equity ratio to less than 50 per cent.