Why is financial slack valuable?

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Fundamentals of Corporate Finance

ISBN: 978-0078034640

7th edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

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Question Posted: Sep 27, 2016 10:44 AM

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For what kinds of companies is financial slack most valuable? Are there situations in which financial slack should be reduced by borrowing and paying out the proceeds to the stockholders? Explain.
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Why is financial slack valuable?

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Financial slack refers to a firms access to cash marketable securities bank f...View the full answer

Fundamentals of Corporate Finance

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