Super Finance Glossary
Over 10,000 financial glossary terms...
Underinvestment Problem
Underinvestment Problem
Definition: The mirror image of the asset substitution problem, in that stockholders refuse to invest in low-risk assets to avoid shifting wealth from themselves to debtholders.
Definition: The mirror image of the asset substitution problem, in that stockholders refuse to invest in low-risk assets to avoid shifting wealth from themselves to debtholders.