Which of the Following Statements Is Most Correct

Multiple Choice

Which of the following statements is most correct?

A) Compensating managers with stock can reduce the agency problem between stockholders and managers.
B) Restrictions are included in credit agreements to protect bondholders from the agency problem that exists between bondholders and stockholders.
C) The threat of a takeover can reduce the agency problem between bondholders and stockholders.
D) Statements a and b are correct.
E) All of the statements above are correct.