Kizspy | Question: 34
(Choose 1 answer)
FLIOVERFLOW LOW
Debt can reduce agency costs between shareholders and management, but
A. only if the firm is totally up to its eyeballs in debt.
B. excessive debt can create its own agency conflicts.
C. only to the extent that the firm can commit all of its free cash flow.
D. debt is best used as a corporate governance mechanism by young companies with limited cash reserves.
