One of the Indirect Costs to Bankruptcy Is the Incentive

Multiple Choice

One of the indirect costs to bankruptcy is the incentive toward underinvestment. Following this strategy may result in:
I.the firm always choosing projects with positive NPVs;
II.stockholders turning down low-risk, low-return but positive NPV projects;
III.the firm declaring and paying high cash dividends

A) I only
B) II only
C) III only
D) II and III only