When a company is in financial distress,its shareholders may have an incentive to undertake excessively risky investments.

Question

Quizplus · Accepted Answer

When a company is in financial distress, its shareholders may feel pressure to take risks in order to try and recover from losses or maintain their investment. This can lead to excessive or ill-advised investments, as shareholders prioritize short-term gain over long-term stability.

When a Company Is in Financial Distress,its Shareholders May Have