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ss7ja [257]
3 years ago
5

The shareholder-debtholder conflict refers to:________

Business
1 answer:
Lera25 [3.4K]3 years ago
4 0

Answer:

C

Explanation:

The shareholder-debtholder conflict usually arises because shareholders would prefer the firm to engage in more risky business activities. This is because this has the potential to increase the income of the firm and as a result, the wealth of shareholders.

On the other hand debtholders would not want the firm to engage in risky activities because it might negatively affect the firm's ability to make its schedules payments to debtholders.

In order to protect themselves, debtholders usually draft a deb covenant which contains allowable activities of the firm

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Reliability is the probability that a product or system will function when activated. True or False
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