Which One of the Following Statements Is Correct

question 21

Multiple Choice

Which one of the following statements is correct?

• A)Informed managers tend to issue new securities when the existing securities are underpriced.
• B)The financial market generally reacts in the same way to a new issue of equity as it does to a new issue of debt as long as the issuer is the same.
• C)A decline in the price of existing stock when a new issue is released is a direct cost of selling securities.
• D)Issuing new equity shares is always viewed by the market as a positive event.
• E)A firm's existing shareholders would prefer that new securities be issued when those securities are overpriced rather than underpriced.

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Definitions:

Participative Leadership

is a style where leaders involve team members in the decision-making process, fostering a sense of ownership and motivation among participants.

Centralization

The concentration of decision-making authority at the top levels of an organization's management hierarchy.

Power Sharing

A practice or arrangement where control, authority, or influence over decision-making processes is distributed among various stakeholders or groups to ensure fair and equitable participation.

Prolonged

Continuing for a long time or longer than usual.