Question: Explain whether the following will impact current shareholder wealth. Explain how and why using theories of capital structure. Consider the situations separately. A firm issues

Explain whether the following will impact current shareholder wealth. Explain how and why using theories of capital structure. Consider the situations separately.

A firm issues a large number of shares to fund a new project.

Managers of a financially distressed firm (close to bankruptcy) pay a large dividend to shareholders and pay themselves a large bonus using proceeds from fire sales of some of the firms assets.

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