Under-investment problems refers to the problem

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Reference no: EM13928065

Under-investment problems refers to the problem that equity holders prefer not to invest in positive-NPV projects in highly levered firms because

a. projects are contingent on equity financing

b. future investments are contingent on debt financing.

c. gains are evenly shared between all stakeholders.

d. most of the gains from the investment accrue to debt holders.

Reference no: EM13928065

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