Question
Debt can be used to constrain managers because it: Provides additional cash flow for their use. Precommits a firm's excess cash flow to debt servicing.
Debt can be used to constrain managers because it:
| Provides additional cash flow for their use. | ||
| Precommits a firm's excess cash flow to debt servicing. | ||
| Allows the management to issue more shares. | ||
| Eliminates a CEO's tendency to acquire other firms without a sound economic rationale. | ||
| Makes a CEO more likely to accept positive NPV projects. |
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Innovation And Technology
Authors: Nikos Vernardakis
1st Edition
0415676800, 978-0415676809
