Asymmetric information implies that may have better information about a firm's cash flows than other stakeholders.

Question

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Managers may have better information about a firm's cash flows due to their direct involvement in the day-to-day operations of the business. They may have access to information about sales forecasts, production costs, and inventory levels that other stakeholders may not have. This information asymmetry can be problematic for other stakeholders, such as debt holders, creditors, and suppliers, who may rely on accurate and timely information about a firm's cash flows to make decisions about lending or extending credit.

Asymmetric Information Implies That May Have Better Information About a Firm's