Which one of the following statements is correct?
Choose one answer.
a. The financial market tends to react the same whether a new issue of securities is a debt issue or an equity issue.
b. The issuance of equity securities is always viewed as a positive event for the issuer.
c. Informed managers tend to issue new securities when the existing securities are underpriced.
d. An abnormal return of 5 percent is considered the norm.
e. A firm's existing shareholders would prefer that new securities be issued when those securities are overpriced rather than underpriced.