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When shareholders pursue strategies such as taking excessive risks or paying excessive dividends, these will result in:
I.no action by debtholders since these are equityholder concerns;
II.positive agency costs, as bondholders act on various restrictions and covenants, which will diminish firm value;
III.investments of the same risk class that the firm is in
Withdraw
To remove funds from a bank account, or to pull back an offer or participation in an activity.
Annual Percentage Rate
The Annual Percentage Rate (APR) is the yearly interest rate charged on borrowed money, encompassing both the interest rate and any associated fees, to represent the total cost of borrowing.
Per Month
The term per month is used to describe or quantify an event, action, or measurement over the period of a month.
Compounded Monthly
A method of calculating interest where the interest earned on an investment is reinvested and earns additional interest in subsequent periods on a monthly basis.
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