Question: Barbara can seek financing by issuing either debt or equity. If Barbara devotes minimal effort to her job, her salary will remain at $80,000. If

Barbara can seek financing by issuing either debt or equity. If

Barbara can seek financing by issuing either debt or equity. If Barbara devotes minimal effort to her job, her salary will remain at $80,000. If Barbara works hard, she stands a 50 percent chance of getting a promotion and a raise to $120,000, so that her expected income will be $100,000. Barbara's disutility of working hard is $16,000, and her cost of funds is $25,000. Assume that information is asymmetric and that everyone is risk neutral. Also, Barbara keeps the full surplus from her hard work.In equilibrium, Barbara issuesA. equity; works hardB. equity; shirksC. debt; works hardD. debt; shirks

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