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underinvestment

Title English: 
underinvestment
Definition English: 
An agency problem where a company refuses to invest in low-risk assets, in order to maximize their wealth at the cost of the debt holders. Low-risk projects provide more security for the firm's debt holders, since a steady stream of cash can be generated to pay off the lenders. The safe cash flow does not generate an excess return for the shareholders. As a result, the project is rejected, despite increasing the overall value of the company.
Title Arabic: 
استثمار غير كاف
Synonym Arabic: 
استثمار ناقص
المجال الأحصائي: 
Economic Development
الموضوع: 
Foreign Investments
InformationType: 
Term
SourceSymbol: 
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