Question

7 The announcement of a stock offering (ralse capital through issuing more shares of stock) by a mature firm that seems to have multiple financing alternatives is taken as a signal that a. the firm is in big trouble b. the CEO has accepted an invitation to go on CNBC c. the firm's prospects are very good d. the firm's prospects are "not" very good e none of the above 8 The assumption that managers have exactly the same information about a firms prospects as It shareholders a. the inefficient market hypothesis b. symmetric information c. asymmetric information d buddy system none of the above e

Answer 1

Answer 7)

When moer stock offering is done by the company, it means that the co has investment opportunity which needs funds which is a good thing. This means that firm's prospects are good.

Option C is correct.

Answer 8)

When all have the infomation i.e. Shareholders and the Managers which is same i.e. in a harmonious manner. This is called Symmetric information.

option b is correct.

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