Answer:
The correct answer is letter "A": debt; equity.
Explanation:
Economists Franco Modigliani (1918-2003) y Merton Miller (1923-2000) in the signaling theory assume that investors and managers have the same information. Differences were caused as the result of companies issuing new stock when its price was overvalued or bonds when their price is undervalued.
Under that scenario, <em>managers usually were confident in their firms' ability to generate capital. Then, they tended to issue new debt. However, managers discouraged usually issued new equity in the form of stocks or bonds.</em>
A primary market is where securities are bought and sold.
You can buy and sell securities through brokerages, the issuing company, banks, or individual investors.
China and America the largest global business opportunities for the next decade
So that the goverment can make things like roads and buildings, as well as pay for things like public school, courts, prisons, colleges, hospitals, etc.
Answer:
$2.4 million
Explanation:
The total assets of the firm are funded by both debt and equity,hence, the total assets is the same as total equity plus total debt based on the accounting equation formula below:
total assets=equity+debt
tota assets=$4 million
equity=unknown
debt can be derived using the debt ratio as shown thus:
debt ratio=debt/total assets
debt ratio=40%
debt=unknown
total assets=$4 million
40%=debt/$ 4 million
debt=40%*$4 million
debt=$1.6 million
$4 million=equity+$1.6 million
equity=$4 million-$1.6 million
equity =$2.4 million
