Generally, Managers of Corporations Prefer Internally Generated Cash to Finance

question 38

Multiple Choice

Generally, managers of corporations prefer internally generated cash to finance their capital expenditures because

• A)they can avoid the discipline of financial markets.
• B)the costs of issuing new securities are high.
• C)the costs of issuing new securities are high and the announcement of a new equity issue is usually bad news for investors.
• D)they can avoid the discipline of financial markets, the costs of issuing new securities are high, and the announcement of a new equity issue is usually bad news for investors.

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Definitions:

Median

The middle value in a sorted list of numbers, effectively dividing the dataset into two halves.

Regression Toward

A statistical phenomenon that describes how extreme scores on a variable tend to be closer to the average on subsequent measurements.

Emotional Distress

A negative emotional state that may arise from various causes, including stress, anxiety, or traumatic events.

Mode

The most common number found in a set of data.