The use of debt financing:
A) reduces agency costs between the shareholders and management by increasing the amount of risk the managers take.
B) increases agency costs between the shareholders and management by limiting the amount of risk the managers take.
C) increases agency costs since managers prefer to keep more retained earnings rather than pay a dividend.
D) b and c.

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The Answer of The use of debt financing:
A) reduces agency costs between the shareholders and management by increasing the amount of risk the managers take.
B) increases agency costs between the shareholders and management by limiting the amount of risk the managers take.
C) increases agency costs since managers prefer to keep more retained earnings rather than pay a dividend.
D) b and c.

The Use of Debt Financing