ABC Company is planning a major expansion for which it needs $5 million in external...
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Accounting
ABC Company is planning a major expansion for which it needs $5 million in external funding. It has various options as how to finance this expansion. Which of the following is correct?
a. Future ROA will be higher if it uses all equity financing than if it uses some debt financing
b. Future net income will be higher if it uses common stock rather than preferred stock to finance expansion
c. Future ROA is independent of the form of financing
d. Future net income is independent of the form of financing
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