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What is the Signaling Theory? A. Management will avoid using debt if they are confident...

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Question

Accounting

What is the Signaling Theory?

A. Management will avoid using debt if they are confident about the company

B. Management will pay extra taxes to the IRS just to show their liquidity

C. Management will select its leverage level to show they are financially strong enough to handle high debt

D. Management will avoid the use of debt tax shields

E. None of the above

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