Which of the following two statements is correct?

S1: Signaling theory stipulates that, because information is symmetric, capital structure is a result of investors sending market signals to managers of firms.

S2: Pecking order hypothesis states that capital structure is a result of managers timing capital markets; for example managers will issue new or additional equity when stock markets are hot and borrow when bond markets favor borrowers.

1)Both, S1 and S2 are false

2)Both, S1 and S2 are correct

3)S2 is correct but S1 is false

4)S1 is correct but S2 is false

The primary goal of a publicly-owned firm interested in serving its stockholders should be to:

1)Maximize the shareholders wealth or stock price

2)Minimize the chances of losses

3)Maximize expected EPS

4)Maximize expected total corporate profit