$46$:$16$

Time Remaining

$8$

Multiple Choice

$2$ points

Which of the following is CORRECT about agency costs?

$$ Overinvestment refers to the problem of investing in too many projects which causes the form to face high leverage.

Underinvestment refers to the problem that equity holders are unwilling to talk positive Nove projects that only benefit debt holders.

Facing high leverage, bond holders have an incentive to echaust frrm$/$s remairire value before it goes to bankruptey such as issuing a high coupon to themselves.

Managerial entrenchment problem can be alleviated by reducing leverage.

Clear my selection

$$