Explore BrainMass
Share

The Lemon Principle

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

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.

© BrainMass Inc. brainmass.com December 20, 2018, 10:19 am ad1c9bdddf
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.

$2.19