Low Charter Values Can Induce the Banks to Take on Higher

Low charter values can induce the banks to take on higher risk because

A) low charter values indicate a higher volatility of asset values.
B) low charter values imply a higher likelihood of insolvency and hence a lower bankruptcy cost.
C) low charter values imply a lower likelihood of insolvency and hence a higher bankruptcy cost.
D) low charter values indicate a relatively sound financial condition and hence allow the banks to take on more risk to increase profits.
E) all of the above