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Would it be worse if the firm raised equity

Problem:

If investors are rational and managers are overoptimistic, how would the value of the firm change if management were to raise more money for new projects? Would it be worse if the firm raised equity? Substantiate your response.

Please use Welch I. (2009). Corporate Finance: An Introduction. Upper saddle River NJ: Prentice-Hall

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Other Management: Would it be worse if the firm raised equity

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