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1. Which of the following statements is true about debt signaling? i. The stock price is expected to rise when debt is retired by issuing

1. Which of the following statements is true about debt signaling?

i. The stock price is expected to rise when debt is retired by issuing new equity.

ii. The stock price is expected to fall when equity is repurchased by issuing new debt.

A. i only B. ii only C. Both of the above D. Neither of the above

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