An agency cost that occurs even when there is adequate monitoring and bonding present is most likely:

Group of answer choices

residual loss.

environmental regulation costs.

government corruption costs.

According to the pecking order theory, the most likely first source of financing that a company's management opts to access is:

Group of answer choices

common stock issuance.

retained earnings.

debt issuance.

A country is raising its corporate tax rates. At the point in time when the tax rate is increased, the weighted average cost of capital (WACC) for a levered company operating in that country will most likely:

Group of answer choices

rise.

not change.

fall.

In accordance with Modigliani and Miller Proposition II and assuming no taxes, it is most likely that the cost of:

Group of answer choices

total capital declines with higher leverage.

debt rises with higher leverage.

equity rises with higher leverage.