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QUESTION 9 10 The CEO of Firm B has just learned that the patent for...

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Finance

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QUESTION 9 10 The CEO of Firm B has just learned that the patent for a new product has been denied due to failure to sufficiently differentiate from an existing product. The CEO and CFO meet to discuss how to raise new capital for furthering the R&D program for the product in question. The CFO says: "Issuing new stock shares would likely put a damper on the stock price, as investors will take the move as a signal we believe the price of the stock is overvalued. If we raise more debt however, our stockholders will suffer since the expected cash flows from the product's development will be delayed, and we'll have lost the opportunity to dilute the negative impact on their investments. Preferably, we'd rather use our internal equity to finance the R&D program." Which part of the CFO's statement is incorrect? The CFO's statements are all correct. The statement regarding internal equity. The statement about regarding the effect of raising new debt. The statement about the signal's impact on the market perception

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