questiona explain what the debt overhang problem


Question:

a. Explain what the debt overhang problem is (following the lines of Myers 1977) make sure that you specify what the relevant conflict of interest is and what are the key necessary conditions for this problem to happen?

b. Explain the "asset substitution" effect. Again make sure that you clarify which agents are in conflict and the necessary conditions for the problem to happen.

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Financial Management: questiona explain what the debt overhang problem
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