Masulis (1980) documented evidence that the market generally reacts favorably to a leverage- increasing debt-for-equity swap, and unfavorably to a leverage decreasing equity-for-debt swap
Which of the following is NOT a legitimate theoretical explanation for these market reactions?
a. Increasing leverage increases the tax shield of debt, while extinguishing debt decreases it. b. Increasing leverage induces an expropriation of wealth from existing creditors, while extinguishing debt accomplishes the opposite.
c. Increasing leverage via a swap involves paying a dividend to shareholders while decreasing leverage via a swap forces the firm to issue equity.
d. Increasing leverage disciplines management to act in shareholders' interest by absorbing free cash flow, while decreasing leverage increases management's ability to pursue self-serving activities.
C
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Answer the following statements true (T) or false (F)
1. One strategy to invite guests to participate is to let the organization’s market segment know that everyone entering the service setting must provide some of the service themselves. 2. Segmenting the service process so that guests entering the service setting can choose the extent to which they can or will participate is inadvisable because it creates many inefficiencies. 3. If firing a guest becomes necessary, a subtle firing is always better than an abrupt firing. 4. A guest who is more engaged creates a better quality product than if the organization created it for them.
What are some of the advantages of multinationals from emerging markets when compared to companies from developed markets?
What will be an ideal response?
The daily closing values of the Dow Jones Industrial Average over a period of 30 days are best described as _____ data
a. cross-sectional b. discrete c. time-series d. nominal
The assumption that requires that a business be accounted for separately from its owners is the ________ assumption.
What will be an ideal response?