13. Agency costs (S17-2) In Section 17-2, we briefly referred to three games: playing for time, cash
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13. Agency costs (S17-2) In Section 17-2, we briefly referred to three games: playing for time, cash in and run, and bait and switch.
For each game, construct a simple numerical example (like the example for the risk-shifting game) showing how shareholders can gain at the expense of creditors. Then explain how the temptation to play these games could lead to costs of financial distress.
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Related Book For
Principles Of Corporate Finance
ISBN: 9781264080946
14th Edition
Authors: Richard Brealey, Stewart Myers, Franklin Allen, Alex Edmans
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