When Shareholders Pursue Strategies Such as Taking Excessive Risks or Paying

Multiple Choice

When shareholders pursue strategies such as taking excessive risks or paying excessive dividends, these will result in:
I.no action by debtholders since these are equityholder concerns;
II.positive agency costs, as bondholders act on various restrictions and covenants, which will diminish firm value;
III.investments of the same risk class that the firm is in

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