A Valuable Firm Will Tend To

Multiple Choice

A valuable firm will tend to:

A) see its stock price increase if it issues debt beyond its optimal debt level.
B) issue more debt than a less valuable firm of comparable size.
C) reduce its debt level as a positive signal for the firm.
D) issue debt,but only on a temporary basis purely to fool investors regarding the firm's value.
E) see its stock price increase when it announces an exchange offer that decreases its leverage.