Capital rationing may be imposed because of all of the following EXCEPT
A) capital market conditions are poor.
B) management has a fear of debt.
C) stockholder control problems prevent issuance of additional stock.
D) the company's stock price is at an historically high level.

Question

Quizplus · Accepted Answer

Capital rationing may be imposed due to poor capital market conditions, management's fear of debt, and stockholder control problems. However, a company's stock price being at an historically high level is not a reason for imposing capital rationing. In fact, a high stock price may indicate that the company has access to capital and may not need to impose capital rationing.

Capital Rationing May Be Imposed Because of All of the Following