When shareholders pursue strategies such as taking excessive risks or paying excessive dividends, these will result in
A) no action by debtholders since these are equityholder concerns.
B) positive agency costs, as bondholders act on various restrictions and covenants, which will diminish firm value.
C) investments of the same risk class that the firm is in.
D) no action by debtholders since these are equityholder concerns and investments of the same risk class that the firm is in.
Correct Answer:
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