Problem
The government has decided to change the limited liability of shareholders. Under the new rule, shareholders will have to pay debtholders up to an additional $5 per share in the case of default/bankruptcy (i.e., if the firm goes bankrupt and there is not enough money to fully pay off the debt, then shareholders will have to pay up to an additional $5 from their own personal account/assets). How would this change affect the shareholder/debtholder conflict (agency cost of debt)?