According to the pecking order theory proposed

Assignment Help Financial Management
Reference no: EM132057591

Which of the following is/are true?

I. According to the pecking order theory proposed Stewart Myers of MIT, firms prefer to source external debt rather than issue new equity.

II. According to the pecking order theory proposed Stewart Myers of MIT, firms avoids issuing because they don't want to commit to paying dividends on the new equity.

III. According to the pecking order theory proposed Stewart Myers of MIT, for financing needs, firms prefer to first tap internal sources such as retained profits and excess cash.

       I and III only

       II only

       II and III only

       I and II only

       I, II, and III

2. Which of the following is/are true?

I. If the returns from the two assets are perfectly positively correlated (that is, the correlation coefficient between these two asset is 1), there will always be some proportion of the assets that will result in the complete elimination of portfolio risk.

II. If the returns from the two assets are zero correlated (that is, the correlation coefficient between these two asset is zero), the risk of the portfolio is below the weighted average of the total risk of the individual assets.

      I only

      II only

      Both I and II

      Neither I nor II

Reference no: EM132057591

Questions Cloud

Infrastructure complementary and related : How are virtualizing the desktop and backend infrastructure complementary and related?
What can you do to help save social security and medicare : What can you do now to help save Social Security and Medicare? Some believe it is essential to send politicians to Washington and Tallahassee.
Systematic risk and unsystematic risk : An investment's total risk can be partitioned into two parts, systematic risk and unsystematic risk.
Why are developmental phases important : PSY 331 Evaluate and discuss the applicability of Piaget's theory of cognitive development. Why are developmental phases important to consider when addressing.
According to the pecking order theory proposed : According to the pecking order theory proposed Stewart Myers of MIT, firms prefer to source external debt rather than issue new equity.
Using valid matlab commands and the plot : Using valid Matlab commands and the plot() and cosd() functions, plot the cosine function cosd(t) versus t between 0 and 360 degrees (using 81 plotting points)
Considered cost of financial distress : Which of the following would not be considered a cost of financial distress?
Rationalities and modernization in the ika case study : How does IS innovation affect the situation rationalities and modernization in the IKA case study?
How organizations behave and why : Universalist rationality theory assumes that actors within an institution are rational. Explain the validity of these critiques based on how organizations behav

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd