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    The Lemon Principle

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    What impact does asymmetric information have on the optimal level of leverage?

    Describe the implications of adverse selection and the lemons principle for equity issuance, as well as the empirical implications.

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    https://brainmass.com/business/financial-distress-and-bankruptcy/the-lemon-principle-520841

    Solution Summary

    This solution looks at the Lemon Principle of investment characteristics. The relationship of performace and managerial efficiency is discussed.

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