Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Cite and describe two ways that the uniqueness of assets creates agency costs for shareholders. Multiple choices are: employees can demand a risk premium (higher
Cite and describe two ways that the uniqueness of assets creates agency costs for shareholders.
Multiple choices are:
employees can demand a risk premium (higher compensation) for their effort to develop specialized talent that is not valuable to other employers | ||
lenders can demand a risk premium (higher interest rate) for loaning against a unique asset (collateral) | ||
new shareholders can demand a risk premium (higher required rate of return) for investing in a firm that uses unique assets | ||
customers can demand a risk premium (lower price) for buying a product from a firm that uses unique assets | ||
A and B | ||
A and C | ||
A and D | ||
B and C | ||
B and D | ||
C and D | ||
all but A | ||
all but B | ||
all but C | ||
all but D | ||
all are true |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started