According to the signaling theory, when should a firm use debt beyond the normal target capital structure??
A. ?When the debt/assets ratio is greater than one
B. When marginal tax shelter benefits are equal to marginal bankruptcy-related costs?
C. ?When investors and managers have identical information about the firm's prospects
D. ?When the firm has favorable prospects
E. ?When the firm is entirely equity financed
Answer: D
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What will be an ideal response?
A family partnership can be used to shift a portion of the income from a capital-intensive manufacturing business to a taxpayer's young children.
Answer the following statement true (T) or false (F)
Apex University (AU) offers classes online. AU asks each student enrolling online to agree to submit any dispute to arbitration and to indicate assent by clicking a box. AU claims that it is the cheapest undergraduate program in the United States. Beth enrolls in the program but later charges AU with fraud based on its "cheapest" claim. Beth could pursue her claim
a. in a court. b. in an arbitration proceeding. c. nowhere. d. anywhere.
The net present value is zero at the IRR
Indicate whether the statement is true or false