1. For a given level of earnings (E), net new investment (l), and dividends (D), explain why...
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1. For a given level of earnings (E), net new investment (l), and dividends (D), explain why a firm must issue new stock if E < D + I and it desires to maintain a constant debt-equity ratio. Similarly, why must it repurchase shares if E > D + I and it desires to maintain a constant debt-equity ratio?
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Related Book For
Investments
ISBN: 9788120321014
6th Edition
Authors: William F. Sharpe, Gordon J. Alexander, Jeffery V. Bailey
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