When a Firm's Investment Decisions Have Different Consequences for the Value

question 68

Multiple Choice

When a firm's investment decisions have different consequences for the value of equity and the value of debt,managers may take actions:

• A)to increase debt values.
• B)to decrease costs of distress.
• C)that benefit shareholders at the expense of debt holders.
• D)that benefit debt holders at the expense of shareholders.
• E)to reduce fixed costs.

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