Which one of the following statements is correct? Informed managers tend to issu

Question

Which one of the following statements is correct?

Informed managers tend to issue new securities when the existing securities are underpriced.

Issuing new equity shares is always viewed by the market as a positive event.

A decline in the price of existing stock when a new issue is released is a direct cost of selling securities.

The financial market generally reacts the same to a new issue of equity as it does to a new issue of debt as long as the issuer is the same.

A firm's existing shareholders would prefer that new securities be issued when those securities are overpriced rather than underpriced.

Explanation / Answer

the correct answer is b

Issuing new equity shares is always viewed by the market as a positive event.

because market is the one of micro enviroment factor and effect by the price of the company stock

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