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Author Question: Which of the following is a reason for a firm to underprice new issues? A) When the market is in ... (Read 39 times)

Lobcity

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Which of the following is a reason for a firm to underprice new issues?
 
  A) When the market is in equilibrium, additional demand for shares can be achieved only at a higher price.
  B) When additional shares are issued, each share's percent of ownership in a firm is diluted, thereby justifying a higher share value.
  C) When additional shares are issued, each share's percent of ownership in a firm is concentrated, thereby justifying a lower share value.
  D) When the market is in equilibrium, additional demand for shares can be achieved only at a lower price.

Question 2

Using the DuPont system of analysis, holding other factors constant, an increase in financial leverage will result in ________.
 
  A) an increase in the return on equity
  B) a decrease in the gross profit margin
  C) an increase in the gross profit margin
  D) an increase in retained earnings



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atrochim

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Answer to Question 1

D

Answer to Question 2

A




Lobcity

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Reply 2 on: Jul 11, 2018
:D TYSM


aliotak

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Reply 3 on: Yesterday
Wow, this really help

 

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