Question: Please have a rf for each ques. 1. A. What is an agency problem ? B. How could capital structure decisions reduce agency problems? A

Please have a rf for each ques.

1. A. What is an agency problem? B. How could capital structure decisions reduce agency problems? A key idea in this school of thought is the managerial discipline imposed by higher debt levels.

2. What is the asset substitution problem? Why is it a "problem"?

3. What is the underinvestment problem? Why is it a "problem"?

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