A new law in Gondolin requires firms that enter financial distress report their financial situation to the stock exchange every month. Analysts argue the new law will lead to an increase in financial distress costs. Which of the below is likely to be an effect of this new law

a) Hedging by firms is likely to increase

b) Hedging by firms is likely to decrease

c) Hedging is unlikely to be affected by the law

d) According to M&Ms classic assumptions, leverage is likely to increase

e) Both a and d are correct