Question 1 Not yet answered Marked out of 1.00 Fazzari, Hubbard and Petersen find that cash flow significantly explains investment rates for even the mature, high dividend paying, Financially unconstrained firms. These firms, like every other firm in the economy, pay a premium to get external finance. The logical decision for these firms would be to cut dividends and use this income to finance new investment. This policy would be particularly effective during recessions when firms face cash crunch. What stops these firms from doing so? Select the most likely explanation based on the empirical evidence from FHP. P Flag question Select one: O a. This is an erroneous finding arising from measurement errors in Q. b. Cutting dividends would send a bad signal to the market. C. Asymmetric information problems inherent in capital markets. d. To avoid agency cost problems arising from unproductive investments