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Title: In an agency problem known as debt overhang, if the company has risky debt outstanding, equity ... Post by: Memphic on Nov 20, 2017 In an agency problem known as debt overhang, if the company has risky debt outstanding, equity holders will choose to invest only if:
A) the NPV of the project exceeds a cutoff equal to the relative riskiness of the firm's debt times its debt-equity ratio. B) the profitability index of the project exceeds a cutoff equal to the relative riskiness of the firm's debt times its debt-equity ratio. C) the NPV of the project is negative. D) the debt holders will lose all their money. Title: Re: In an agency problem known as debt overhang, if the company has risky debt outstanding, equity ... Post by: EgorGruzdev on Nov 20, 2017 Content hidden
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