Multiple Choice
What does "risk shifting" imply?
A) When faced with bankruptcy, managers tend to invest in high-risk, high-return projects.
B) When faced with bankruptcy, managers do not invest more equity capital.
C) When faced with bankruptcy, managers may make accounting changes to conceal the true extent of the problem.
D) When faced with bankruptcy, managers invest in low risk projects to conserve capital.
Correct Answer:
Verified
Correct Answer:
Verified
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