Question
Debt can reduce agency costs between shareholders and management, but only to the extent that the firm can commit all of its free cash flow.
Debt can reduce agency costs between shareholders and management, but
| only to the extent that the firm can commit all of its free cash flow.
| ||
| excessive debt can create its own agency conflicts.
| ||
| debt is best used as a corporate governance mechanism by young companies with limited cash reserves. | ||
| only if the firm is totally up to its eyeballs in debt. |
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Entrepreneurial Financial Management An Applied Approach
Authors: Jeffrey R Cornwall, David O Vang, Jean M Hartman
5th Edition
0367335417, 978-0367335410
