How debt ratios are likely to differ in the three firms

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Reference no: EM131426833

Consider three similar firms that differ only in the extent to which they are controlled by their boards of directors.

In firm 1, the board has complete control of the investment decisions, operating decisions, and financing choices.

In firm 2, the board is unable to monitor investment and operating decisions, but they do control financing decisions.

In firm 3, the board has very little control over either investment, operating, or financing decisions. Describe how debt ratios are likely to differ in the three firms

Reference no: EM131426833

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