A Type of Agency Problem That Results in Shareholders Gaining

question 109

Multiple Choice

A type of agency problem that results in shareholders gaining from decisions that increase the risk of the firm sufficiently,even if they have negative NPV is:

• A)asset substitution.
• B)debt overhang.
• C)underinvestment.
• D)cashing out.

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Definitions:

Self-actualization

The realization or fulfillment of one's talents and potentialities, considered as a drive or need present in everyone.

Appeal

The power to attract or interest people, often used in marketing or storytelling.

Demographic Information

Data related to the characteristics of a population or specific groups within it, such as age, gender, income, and education.

Occupation

The job or profession someone is engaged in.