Question
Which one of the following statements is not correct? A. In the context of Bhattacharya (1979) dividends signal firm quality since equity is more expensive
Which one of the following statements is not correct?
A. In the context of Bhattacharya (1979) dividends signal firm quality since equity is more expensive than debt. B. The basic result of Myers and Majluf (1984) S that equity issue announcement has negative effect on stock price
C. In the context of Myers and Majluf (1984) managers know more than the market of firm's value and the project NPV. Their model shows that liquid assets affect for the solution
D. in the context of Leland and Pyle (1977) entrepreneur seeks outside equity to finance her project. According to them under information asymmetry between entrepreneur and outsiders her ownership increases if project quality is high.
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