Homework answers / question archive / Which of the following statements is true? When a firm issues bonds of equal or higher priority to its existing debt, the value of both the existing bonds and the value of the equity will decrease O When a firm can issue bonds of equal or higher priority than its existing bonds, the value of the firm is decreased due to the higher cost of debt capital Although the value of a firm is unchanged if it can issue debt of equal or greater priority to its existing debt, its cost of debt capital will be higher None of them

Which of the following statements is true? When a firm issues bonds of equal or higher priority to its existing debt, the value of both the existing bonds and the value of the equity will decrease O When a firm can issue bonds of equal or higher priority than its existing bonds, the value of the firm is decreased due to the higher cost of debt capital Although the value of a firm is unchanged if it can issue debt of equal or greater priority to its existing debt, its cost of debt capital will be higher None of them

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Which of the following statements is true? When a firm issues bonds of equal or higher priority to its existing debt, the value of both the existing bonds and the value of the equity will decrease O When a firm can issue bonds of equal or higher priority than its existing bonds, the value of the firm is decreased due to the higher cost of debt capital Although the value of a firm is unchanged if it can issue debt of equal or greater priority to its existing debt, its cost of debt capital will be higher None of them