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The government has decided to change the limited liability of corporate shareholders. Under the new rule, shareholders will have to pay debtholders up to an
The government has decided to change the limited liability of corporate shareholders. Under the new rule, shareholders will have to pay debtholders up to an additional $ per share in the case of defaultbankruptcy ie if the firm goes bankrupt and there is not enough money to fully pay off the debt, then shareholders will have to pay up to an additional $ from their own personal accountassets How would this change affect the interest rate on corporate bonds and loans?
A Interest rates would not change.
B Interest rates would increase.
C Interest rates would decrease.
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