Managers, shareholders, and the firm's debtholders have identical information about the value of the firm.

Question

Quizplus · Accepted Answer

Managers may have access to more detailed information about the firm's operations, strategies, and potential investments that may not be readily available to shareholders and debtholders, giving them an informational advantage. Additionally, debtholders may have different interests compared to shareholders and may prioritize debt repayment over maximizing the firm's value.

Managers, Shareholders, and the Firm's Debtholders Have Identical Information About