The signaling theory of capital structure implies that firms should borrow to the maximum as mentioned in the trade-off theory of capital structure.
Answer the following statement true (T) or false (F)
False
In normal times, a firm should maintain a reserve borrowing capacity that can be used in the event that some especially good investment opportunities come along. It should generally use less debt than suggested by the tax benefit/bankruptcy cost trade-off. See 12-5: Capital Structure Theory
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Foreign-exchange brokers help commercial banks carry out foreign exchange trading and maintain desired balances of foreign exchange.
a. True b. False
A letter of transmittal authorizes the researcher to proceed with the project
Indicate whether the statement is true or false
Accounting for capital leases can be thought of as similar to accounting for mortgage payments
Indicate whether the statement is true or false
As a pricing tactic, markup pricing is
A. difficult to implement. B. good at capturing the value consumers place on products. C. the most effective pricing tactic overall. D. not very effective at maximizing profits. E. a good measure of price sensitivity.