A Type of Agency Problem That Results in Shareholders Gaining

question 39

Multiple Choice

A type of agency problem that results in shareholders gaining by choosing not to finance new,positive-NPV projects is:

• A)asset substitution.
• B)debt overhang.
• C)excessive risk-taking.
• D)distress costs.

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Definitions:

Humanists

Focus on the value and agency of human beings, individually and collectively, often emphasizing the importance of human dignity, concerns, and capacities, particularly in the ethical domain.

Humanistic Perspective

A psychological approach that emphasizes the study of the whole person, looking at human behavior through the eyes of the observer and the individual.

Government Intervention

The involvement by government in various aspects of society, economy, or legal system to influence outcomes.

Rational Beings

Entities capable of reasoning and logical thought, often used to distinguish humans in philosophical contexts.