The leading piece of theoretical research in corporate finance is Myers and Majluf (1984)
They showed that when there is information asymmetry between the market and managers, a pecking order emerges in terms of how the firm should obtain funds for capital investments. Specifically, a firm would prefer to use:
a. debt, then retained earnings, and finally outside equity.
b. retained earnings, then debt, and finally outside equity.
c. retained earnings, then outside equity, and finally debt.
d. debt, then outside equity, and finally retained earnings.
B
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Less than 20 percent of the U.S. economy is generated by governmental and not-for-profit organizations
Indicate whether the statement is true or false
Employing an approach using quality attributes is unsuitable for achieving product/service
objectives through a differentiating functionality. Indicate whether the statement is true or false
A new country is formed in central Africa. It has no absolute advantage in crude oil, diamonds, or wool. However, it does manufacture high-quality bows and arrows for specialized safari adventures. Which of the following statements is true?
A. The new country should try to produce its own crude oil, diamonds, and wool. B. The new country has a comparative advantage in the production of bows and arrows. C. The new country has an unqualified advantage in the production of bows and arrows. D. The new country has a determined advantage in the production of arrows. E. The new country is engaged in dumping bows and arrows.
Briefly describe what the Affordable Care Act (ACA) is.
What will be an ideal response?