One Implication of Information Asymmetry Between Investors and Firm Managers

question 88

True/False

One implication of information asymmetry between investors and firm managers is that if a firm raises new capital by issuing debt rather than by selling stock,it signals that the firm has very good prospects.

---

Definitions:

Bruise

An injury appearing as a purple or dark area on the skin, caused by broken blood vessels under the skin without the skin being broken.

Fractured

Having a break or crack in a bone or hard tissue.

Malpractice Suit

A legal action taken against a medical professional or healthcare organization for negligence or providing substandard care that results in harm or injury to a patient.

Medical Record

A comprehensive document containing a patient's medical history, treatment plans, and progress notes, maintained for clinical and legal purposes.