5. Be mindful that investors are aware that you have an incentive to issue securities that you...

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5. Be mindful that investors are aware that you have an incentive to issue securities that you know are overpriced. Thus, when an issue is announced, investors will lower their valuation of that security. This effect is most pronounced for equity issues because the value of equity is most sensitive to the manager’s private information.

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Fundamentals Of Corporate Finance

ISBN: 9781292018409

3rd Global Edition

Authors: Berk, Peter DeMarzo, Jarrad Harford

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