Multiple Choice
A venture capital firm protects its equity investment from moral hazard through which of the following means?
A) It places people on the board of directors to better monitor the borrowing firm's activities.
B) It writes contracts that prohibit the sale of an equity investment to the venture capital firm.
C) It prohibits the borrowing firm from replacing its management.
D) It requires a 50 percent stake in the company.
Correct Answer:
Verified
Correct Answer:
Verified
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