Examples of Behaviours That Create Agency Costs of Debt Include

question 11

Multiple Choice

Examples of behaviours that create agency costs of debt include situations where the borrowing entity:

• A) Goes through a broker to raise debt funds.
• B) Pays minimal dividends.
• C) Invests in high-risk projects.
• D) Puts the borrowed money in the bank.
• E) None of the given Answers.

---

Definitions:

Productivity

The measure of the efficiency of production, often defined as the ratio of output produced to inputs used.

Net Exports

The value of a country's total exports minus its total imports, reflecting the balance of trade.

Capital Deepening

An increase in the amount of capital per worker; one source of rising labor productivity.

Capital Per Worker

A ratio measuring the amount of capital available to each worker, often used as an indicator of labor productivity.