Transfer or Expropriation of Wealth from Bondholders to Equityholders Is

Transfer or expropriation of wealth from bondholders to equityholders is less likely to occur when:

A) subordinated straight debt is issued because there are other senior bondholders to
Protect them.
B) convertible debt is issued because the equity component will reduce these agency costs
When value is shared.
C) convertible debt is issued because the holders can more readily sue when a high-risk
Project is under taken.
D) subordinated debt because monitoring is much easier with subordinated straight debt is
Issued.
E) None of the above.