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Brut [27]
2 years ago
12

The issuance of equity for a firm with various financing alternatives signals that the firm has unfavorable prospects which it w

ants to share with new shareholders according to the signaling theory of capital structure.
a) true
b) false
Business
1 answer:
Ghella [55]2 years ago
4 0

Answer:

Option b) False

Explanation:

Capital structure

This is usually defined as a composition or the combination of debt and equity that are used to finance a firm.

Signaling theory

According to this theory, It states that actions are taken by a firm to send "signals" to shareholders. It states that firms that uses issue debt to raise funds are signaling or projecting that their future prospects are favorable.

In this theory, managers do have information about their firm's prospects than do outside investors. It is also referred to as an action taken by a firm's management that gives possible clues to investors about how management looks at the firm's capital prospects. It centers on the ability to borrow money at a reasonable cost when good investment opportunities comes their way.

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Because there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most bal
inn [45]

Because there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most balanced picture of how prices fluctuate in the economy. Two of the most commonly used price indexes are the consumer price index (CPI) and the GDP deflator. The CPI for this year is calculated by dividing <u>the value of all goods and services produced in the economy this year </u>using <u>this year's prices</u> by the<u> value of all goods and services produced in the economy this year</u> using <u>the base year's prices</u> and multiplying by 100. However, the GDP deflator reflects only the prices of all goods and services bought by the consumers.

<u>Explanation:</u>

GDP is the gross domestic product of a country which specifies the level of growth of the country. The value of the goods and the services of the country produced by the people of the country are all reflected in the gross domestic product of the country.

Greater the rate of GDP is of a particular country, higher would be the growth of the country. It is also used as a measure of comparison of the growth rate of the country.

5 0
3 years ago
Which of the following is important in determining the extent of competition in an industry?
diamong [38]
The answer is c

i hope that helped
5 0
2 years ago
What happens if you perm your hair after washing it?
natali 33 [55]
Its almost the same except your heir will be cleaner and fresher. somethimes it depends on your hair type and texture.
5 0
3 years ago
Critics of the North American Free Trade Agreement argued that opening our borders to free trade with Mexico would result in U.S
myrzilka [38]

Answer:

The criticism is true to a certain degree, and unjustified to another degree.

Explanation:

It is true in the sense that the U.S. has indeed lost a lot of manufacturing to Mexico, simply because Mexico has far lower labor costs, and U.S. manufacturers have decided to take advantage of that by taking their plants to Mexican states.

It is also true that Mexico has been running a trade surplus with the United States in recent years, mainly because of the large manufacturing sector that Mexico has been developing.

On the other hand, the criticism is unjustified because neither a trade deficit nor the moving of manufacturing to Mexico mean that the United States as a whole is in worst condition than before NAFTA. In fact, most economists agree that free trade is a good thing for the economy as a whole, and that most people benefit from the lower costs and specialization that trade brings about.

The problem lies then, in the people who lose their jobs: formerly unionized manufacturing workers from the Rust Belt, for example. These people need to be helped with government assitance, both in terms of welfare, and training, so that they can find new jobs and make ends meet in the meanwhile.

5 0
2 years ago
Let’s assume that we are about to appraise a house using the cost approach. The home was originally constructed in the early 190
guajiro [1.7K]

Answer:

$290,000

Explanation:

We start with the cost of building a replica of the house:

building a new house:                 $350,000

plus highest and best use             $25,000

minus perceived value loss          ($20,000)

minus physical deterioration        ($50,000)

<u>minus building obsolescence       ($15,000)  </u>

appraised value                            $290,000

8 0
3 years ago
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