Question
Evaluate the following statements (5 Statements) with True, False, or Uncertain. Explain your reasoning. Note: Only explainations count! An answer without an explanation gets no
Evaluate the following statements (5 Statements) with True, False, or Uncertain. Explain your reasoning. Note: Only explainations count! An answer without an explanation gets no credit. S1 According to the Modigliana and Miller theorem, if there is no bankruptcy risk, it is optimal for a firm to have 100% debt financing. S2 Compared to IT firms, conglomerates would have lower debt to equity ratios. S3 When the tax rate for the capital gains increases, investors will prefer a firm with a higher dividend rate, other things equal. S4 When there is information asymmetry, corporations' most preferred method of financing would be issuing new equity.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started