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Give Two Example for the above Agency Problems Stockholders v/s Creditors the stockholders...

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Accounting

imageGive Two Example for the above Agency Problems

Stockholders v/s Creditors the stockholders might pick up risky projects for making more profits and this increased risk might elevate the required ROR on the company's debt and hence, the overall value of the pending debts might fall. If the project sinks, the bondholders will supposedly have to participate in losses and this can result in agency problems with the stockholders and the creditors

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