When there is moral hazard between a firm's shareholders and bondholders, the cost of moral hazard is borne by ______in equilibrium.
A)the bondholders
B)the firm's manager
C)the government
D)the shareholders
E)both a and b

Question

Quizplus · Accepted Answer

The Answer of When there is moral hazard between a firm's shareholders and bondholders, the cost of moral hazard is borne by ______in equilibrium.
A)the bondholders
B)the firm's manager
C)the government
D)the shareholders
E)both a and b

When There Is Moral Hazard Between a Firm's Shareholders and Bondholders