No. The asymmetric information theory refers to a preferred pecking order of financing by corporate managers, with
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No. The asymmetric information theory refers to a preferred "pecking order" of financing by corporate managers, with new common stock being the least preferred because of the negative signals that new stock issues typically send to investors. Since not-for-profit firms have no common stock, this theory is not applicable.
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Related Book For
Financial Management Theory And Practice
ISBN: 9780324259681
11th Edition
Authors: Eugene F Brigham, Michael C Ehrhardt
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