Describe some of the information problems in the financial system that lead firms to rely more heavily
Question:
Describe some of the information problems in the financial system that lead firms to rely more heavily on internal funds than external funds to finance their growth. Do these information problems imply that firms are able to spend less on expansion than is economically optimal? Briefly explain.
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Asymmetric information makes information costs for external funds ...View the full answer
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Related Book For 
Money, Banking, and the Financial System
ISBN: 978-0134524061
3rd edition
Authors: R. Glenn Hubbard, Anthony Patrick O'Brien
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