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Question 6: Which of the following statement is false? A-Firms in financial distress will accept negative NPV projects. B- Firms in financial distress will underinvest.

Question 6: Which of the following statement is false?

A-Firms in financial distress will accept negative NPV projects.

B- Firms in financial distress will underinvest.

C- Firms in financial distress should increase debts because of agency cost of debt.

D - Firms in financial distress should increase debts because of agency cost of equity.

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