When Managers Do Not Own Very Much of the Net

question 83

Multiple Choice

When managers do not own very much of the net worth of the firm, then

• A)there may be a principal-agent problem.
• B)the firm will usually have to raise most of its funds in financial markets.
• C)the firm will have to rely more on equity financing than debt financing.
• D)the firm will have to rely more on debt financing than equity financing.

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Definitions:

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