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:
language staff
Link: