Which one of the following statements is correct?

	The financial market generally reacts the same to a new issue of equity as it does to a new issue of debt as long as the issuer is the same.
	Issuing new equity shares is always viewed by the market as a positive event.
	Informed managers tend to issue new securities when the existing securities are underpriced.
	A decline in the price of existing stock when a new issue is released is a direct cost of selling securities.
	A firm's existing shareholders would prefer that new securities be issued when those securities are overpriced rather than underpriced.