Consider the following statements: Statement 1: According to Jensens free cash flow hypothesis, higher debt...
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Finance
Consider the following statements:
Statement 1: According to Jensens free cash flow hypothesis, higher debt levels increase agency costs.
Statement 2: The costs associated with asymmetric information decrease as more debt is issued.
Which of the following is most likely?
|
| Both statements are correct. |
|
| Only Statement 2 is correct. |
|
| Only Statement 1 is correct. |
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