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Under-investment problems refers to the problem that equity holders prefer not to invest in positive-NPV projects in highly levered firms because a. projects are contingent
Under-investment problems refers to the problem that equity holders prefer not to invest in positive-NPV projects in highly levered firms because
a. projects are contingent on equity financing
B..
future investments are contingent on debt financing.
C. gains are evenly shared between all stakeholders.
D most of the gains from the investment accrue to debt holders.
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