While debt can reduce agency costs between shareholders and management,
A) excessive debt may also induce the risk-averse managers to forgo profitable but risky investment projects,causing an underinvestment problem.
B) with debt financing,companies can misuse debt to finance corporate empire building.
C) excessive debt may also induce the risk-averse managers to forgo profitable but risky investment projects,causing an underinvestment problem.Additionally,with debt financing,companies can misuse debt to finance corporate empire building.
D) none of the options
Correct Answer:
Verified
Q51: In the United States,
A)boards of directors are
Q52: For firms with free cash flows,
A)debt can
Q53: The goal of greater accounting transparency
A)is to
Q54: Concentrated ownership of a public company
A)can be
Q55: Concentrated ownership of a public company
A)is normal
Q57: Companies domiciled in countries with weak investor
Q58: While debt can reduce agency costs between
Q59: In Germany,the corporate board is
A)legally charged with
Q60: The board of directors may grant stock
Q61: English common law countries tend to provide
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