Which of the Following Statements Is False

Which of the following statements is false?

A) The optimal level of debt, D*, balances the costs and benefits of leverage.
B) As the debt level increases, the firm benefits from the interest tax shield (which has present value τ*D) .
C) If the debt level is too large, firm value is reduced due to the loss of tax benefits (when interest exceeds EBIT) , financial distress costs, and the agency costs of leverage.
D) As the debt level increases, the firm faces worse incentives for management, which increase wasteful investment and perks.