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Unformatted text preview: Unprofitable firms should borrow more than profitable ones. b. Safe firms should borrow more than risky ones. c. Rapidly growing firms should borrow more than mature firms. d. Increasing leverage increases firm value. e. All of these answers. 3. The Signaling theory for capital structure implies that: a. A company with poor future prospects should raise finance through equity is...
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- Three '08