When faced with financial distress, managers of firms acting on behalf of their shareholders' interests will tend to:
I.issue large quantities of low-quality debt versus low quantities of high-quality debt;
II.favor paying high dividends to shareholders;
III.delay the onset of bankruptcy as long as they can
A)I only
B)II only
C)III only
D)I, II, and III

Question

Quizplus · Accepted Answer

When faced with financial distress, managers of firms acting on behalf of their shareholders' interests will tend to:
I.issue large quantities of low-quality debt versus low quantities of high-quality debt;
II.favor paying high dividends to shareholders;
III.delay the onset of bankruptcy as long as they can

When Faced with Financial Distress, Managers of Firms Acting on Behalf