Capital requirements in tune with the pendulum effect

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Reference no: EM13925418

A firm has been able to manage its capital requirements in tune with the “pendulum effect”. It has just issued more debt to finance its latest project. What would be the next thing the firm will/should do?

a. Issue more equity.

b. Increase the stock price.

c. Stop paying dividends.

d. At least maintain the current dividend pay-out ratio.

e. Lower the interest rate on the newly issued bonds.

Reference no: EM13925418

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