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Basic Question 14 of 15
According to the pecking order theory, the issuance of debt often signals: I. an undervalued stock;
II. an overvalued stock;
III. management confidence that the investment is profitable;
IV. management needs capital beyond what comes cheaply.
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I was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt
Learning Outcome Statements
describe optimal and target capital structures
CFA® 2025 Level I Curriculum, Volume 2, Module 6.