Which of the Following Is a Reason Why Firms Do

question 13

Multiple Choice

Which of the following is a reason why firms do not tend to issue new shares of common stock to fund new projects?

• A) Raising new capital via equity may send a unintended negative signal to the market.
• B) Issuing new equity dilutes a manager's ownership stake in the firm (unless they purchase at least an equal proportion of the new shares as they currently own).
• C) By rationing capital senior managers hope to weed out investments with an optimistic bias built into the cash flow projections.
• D) All of the above are reasons.
• E) Only (b)and (c)are reasons.

Identify independent and dependent events in various contexts.

Apply probability principles to predict outcomes in real-life scenarios.

Interpret sample spaces and construct them for given scenarios.

Recognize the significance of large number repetitions in determining probability.

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Definitions:

Coordination of Secondary Schemes

A developmental stage in infants around 8-12 months where they begin to combine learned behaviors in new ways.

Tertiary Circular

Relates to a stage in Piaget’s theory of cognitive development involving the purposeful adaptation of established behaviors in new contexts, observed in toddlers.

Mental Combinations

The cognitive process of putting together distinct ideas or concepts to form new knowledge or understanding.

Qualitative Changes

Transformations in developmental stages that indicate a fundamental change in an individual's capabilities or behavior.