Many Companies Use Referrals by Current Employees as a Source

Many companies use referrals by current employees as a source for new hiring because

A) it is more expensive than the fees paid to headhunters.
B) current employees are very competitive and want to outperform those they refer.
C) it is a good test of employee loyalty.
D) current employees are normally very careful in recommending someone because their credibility is on the line.