Conflicts of Interest
Circular File Company value (post project)
w Firm value falls by $2, but equity holder gains $3
Circular File Company (Market Values)
Net W.C. 10 20 Bonds outstanding
Fixed assets 18 8 Common stock
Total assets 28 28 Total liabilitiesCircular File Company (Market Values)
Net W.C. 10 20 Bonds outstanding
Fixed assets 18 8 Common stock
Total assets 28 28 Total liabilities