Risk Aversion, Managerial Reputation, and Debt–Equity Conflict
When a firm finances a new project by issuing debt, it has an incentive to invest in excessively high-risk projects because shareholders enjoy all the benefits in case the project is successful but have limited liability when it fails. Anticipating such behavior, creditors may require a higher inter...
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| Format: | Article |
| Language: | English |
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MDPI AG
2022-03-01
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| Series: | Games |
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| Online Access: | https://www.mdpi.com/2073-4336/13/2/25 |