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15. Select all true statements. The static trade-off theory of capital structure: a Disagrees with the empirical evidence that managers follow a pecking-order b. Assumes
15.
Select all true statements. The static trade-off theory of capital structure: a Disagrees with the empirical evidence that managers follow a pecking-order b. Assumes that debt levels contain no signaling value to investors c. Cannot be modified to account for the effect of bankruptcy costs d. Predicts that managers have preferred capital sources which they use to exhaustion before resorting to other financing means Ge Suggests that managers weigh the cost of bankruptcy against the benefit of tax-shields when deciding on debt financing Of Predicts that as corporate tax rates fall firms should choose to finance more by equity Step by Step Solution
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