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If a firm issues new equity after the firm has already had their initial public offering (IPO), the new issue is often interpreted that the

  1. If a firm issues new equity after the firm has already had their initial public offering (IPO), the new issue is often interpreted that the managers of the firm believe that the firms existing stock is:
    1. undervalued in the stock market
    2. correctly valued in the stock market
    3. overvalued in the stock market

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