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A year ago
Which of the following statements is FALSE?
A) The agency costs of debt can arise only if there is no chance the firm will default and impose losses on its debt holders.
B) Agency costs represent another cost of increasing the firm's leverage that will affect the firm's optimal capital structure choice.
C) An under-investment problem occurs when shareholders choose to not invest in a positive-NPV project.
D) When a firm faces financial distress, it may choose not to finance new, positive-NPV projects.
Textbook 

Corporate Finance: The Core


Edition: 4th
Authors:
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A year ago
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A year ago
This course drove me insane!
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