Issuing debt instead of new equity in a closely held firm more likely:

a$.$ causes both more shirking and perquisite consumption since the government provides a tax shield on debt.

b$.$ causes agency costs to fall as owner$-$managers do not need to worry about other shareholders.

c$.$ causes the owner$-$manager to reduce shirking and perquisite consumption as the excess cash flow must be used to meet debt

payments.

d$.$ causes the owner$-$manager to work less hard and shirk their duties as they have less capital at risk.

e$.$ causes the owner$-$manager to consume more perquisites because the cost is passed to the debtholders.