Which of the following is true?
A)A firm with low anticipated profit will likely take on a high level of debt.
B)Investors will generally view an increase in debt as a positive sign for the firm's value.
C)Rational investors are likely to infer a higher firm value from a zero debt level.
D)Rational firms raise debt levels when profits are expected to decline.
E)A successful firm will probably take on zero debt.

Question

Quizplus · Accepted Answer

The Answer of Which of the following is true?
A)A firm with low anticipated profit will likely take on a high level of debt.
B)Investors will generally view an increase in debt as a positive sign for the firm's value.
C)Rational investors are likely to infer a higher firm value from a zero debt level.
D)Rational firms raise debt levels when profits are expected to decline.
E)A successful firm will probably take on zero debt.

Which of the Following Is True