Which one of the following is true?
A)A firm with low anticipated profits will likely take on a high level of debt.
B)Investors will generally view an increase in debt as a positive sign of the firm's value.
C)Rational investors are likely to infer a higher firm value if a firm is all-equity financed.
D)Rational firms raise debt levels when profits are expected to decline.
E)High-growth firms with future positive net present value projects tend to have high levels of debt.

Question

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The Answer of Which one of the following is true?
A)A firm with low anticipated profits will likely take on a high level of debt.
B)Investors will generally view an increase in debt as a positive sign of the firm's value.
C)Rational investors are likely to infer a higher firm value if a firm is all-equity financed.
D)Rational firms raise debt levels when profits are expected to decline.
E)High-growth firms with future positive net present value projects tend to have high levels of debt.

Which One of the Following Is True