Respuesta :

Shareholders sometimes pursue selfish strategies when financial distress is present. These actions generally result in agency costs to bondholders.

A bondholder refers to an investor or the owner who owns the debt securities which are financial and issued by corporations and governments.

Bondholders are essentially responsible for action of lending money to the issuers of bond. In return, these bond investors pursue principal amount, after it gets matured.

Selfish strategies that is often pursued by these shareholders may result in loss or agency cost to the bondholders. Thus these strategies should not be adopted that causes harm to them.

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