Asymmetric information problems

Reference no: EM1357816

13. The pecking order states how financing should be raised. In order to avoid asymmetric information problems and misinterpretation of whether management is sending a signal on security overvaluation the firm's first rule is to:
finance with internally generated funds.
always issue debt then the market won't know when management thinks the security is overvalued.
issue new equity first.
issue debt first.
None of the above.

Reference no: EM1357816

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