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(Solved): thanks! A negative effect of increased debt on the capital structure to control the agency problem c ...



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A negative effect of increased debt on the capital structure to control the agency problem can be:
Select one:
O to. the exce
A negative effect of increased debt on the capital structure to control the agency problem can be: Select one: O to. the excessive payment of corporate taxes for the high interdut on the debt. O b. the excessive investment of managers in projects even with a low NPV. O c. that results in a very high risk aversion in management, leading to little or almost no investment in capital projects, even with positive NPVs. This would cause stagnation or little growth of the firm, O d. a wrong signal that the firm is distributing the firm's risk among more shareholders.


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Ans: option A is c
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