From a firm value perspective: The answers are no and yes. The empirical evidence suggests that increases in funds and thus firm size are usually bad news for the firm. Increases in debt ratios are usually good news.

(The deeper explanation is consistent with a view that investors see equity issues as more opportunities for managers to waste money.) From the perspective of a CFO, it would probably be the opposite—recall the agency conflict discussion in Section 12.8 on page 420. (It will also be taken up again in Chapter 24.)

Managers usually like to reside over big empires (managers of larger firms also usually earn more) and like to enjoy financial flexibility that makes life easy for them.