Agency costs have in capital structure theory

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1. A project's IRR is the interest rate that:

A. causes the project's NPV to equal zero.

B. is used to discount cash flows when computing the project's NPV.

C. is used to determine which one of two mutually exclusive projects should be accepted.

D. is used to compute the project's discounted payback period.

2. What role do information asymmetries, taxes, and agency costs have in capital structure theory?

Reference no: EM131337385

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