9. When an asset substitution problem arises, the agency cost is borne by:

Select one:

a. the equity holders, since the strategy has a negative expected payoff.

b. the debt holders, since they will bear the loss if the risky project is not successful .

c. the equity holders, since they will lose all their money whether or not the project is successful.

d. the debt holders, since they will receive less money if the risky project is successful.