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Assume that agency costs of debt are the only source of market frictions. We expect the following market responses when a firm unexpectedly announces issuance

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Assume that agency costs of debt are the only source of market frictions. We expect the following market responses when a firm unexpectedly announces issuance of equity: Select one alternative: O Stock return 0 O There is not sufficient information provided to determine the impact O Stock return 0 and CDS spread change >0 O Stock return >0 and CDS spread change

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