18. (1 point) The signaling effect of capital structure states that: A. Managers weigh in the benefits of debt versus the cost of debt. B. Managers decide their capital structure by using internal sourees first, then debt and finally equity. C. Managers issue debt when they have favorable information and their stock is undervalued. D. Managers use more debt in their capital structure when agency costs are high. E. Capital structure does not matter when deciding the optimal capital structure. Use the following to answer questions 19 and 20 thinks that more debt should be employed