Which of the Following Is Not an Example of Agency

question 38

Multiple Choice

Which of the following is not an example of agency costs between debt and equity?

• A)A company issues new debt,which ranks equal or higher than existing debt.
• B)A company issues new equity.
• C)A company significantly increases its dividend payout ratio.
• D)A company rejects low-risk investments with positive NPV.

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Definitions:

Prepaid Expenses

Costs paid in advance for goods or services to be received in the future, recorded as assets until they are consumed or used.