The theory that managers may prefer internal sources of funds to the lowest cost source of funds is known as
A) the Modigliani and Miller Proposition.
B) tradeoff theory.
C) financial stress avoidance theory.
D) pecking order theory.
Answer: D
You might also like to view...
General Semiconductor is a European-based designer and manufacturer of semiconductors. It manufactures semiconductors in fixed-asset intensive plants. The moderate fraction of its total assets that are property, plant, and equipment results from depreciating its technology-intensive manufacturing facilities over periods as short as four years. Which of the following is/are true?
a. General Semiconductor has small long-term debt and debt-equity ratios. b. General Semiconductor incurs substantial technology risk from product obsolescence, with product life cycles of less than two years. c. Heavy reliance on debt financing would add financing risk and thereby increase borrowing costs even more. d. All of the above are true. e. none of the above
“Shaping Expectations” is a necessary step in the ____________ process outlined in your text?
a. Leadership development b. Power diffusion c. Conflict avoidance d. Negotiation
Bond covenants are frequently used to limit the dividends payable to stockholders
Indicate whether the statement is true or false.
Bridges (1980) included in his transition model, ______.
A. a step in which leadership determines whether or not to change B. a neutral zone C. punctuated equilibrium D. the unconscious group