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The use of debt financing: is more expensive than issuing equity due to the use of covenants. allows managers to make discretionary interest payments. limits
The use of debt financing:
is more expensive than issuing equity due to the use of covenants.
allows managers to make discretionary interest payments.
limits the ability of managers to waste stockholders' money.
causes a manager to take on riskier projects in order to make interest payments.
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Foundations Of Financial Markets And Institutions
Authors: Frank J. Fabozzi, Franco Modigliani, Michael G. Ferri
2nd Edition
0136860567, 9780136860563
