Please answer these questions, so that I can compare your answer with mine. If possible please explain why.

A firm should agree to whatever restrictive covenants will achieve the lowest interest cost for its debt. a. no, opportunity costs, such as causing the firm to forego a positive-NPV investment, can more than offset the lower interest cost b. yes, the interest cost will be fixed for the life of the debt and offers a positive riskless return c. no, the interest savings may not be worth the cost d. yes, if the firm is going to borrow, the lower the interest cost the better e. A and B f. A and C g. A and D h. B and C i. B and D j. C and D k. all but A l. all but B m all but C . n. all but D o. all are true p. none are true If there are no potential conflicts of interest, can there be an agency problem? a. yes b. no c. dishonesty always causes an agency problem d. an agency problem is defined as a potential conflict of interest in a principal-agent relationship e. A and B f. A and C g. A and D h. B and C i. B and D j. C and D k. all but A l. all but B m all but C . n. all but D o. all are true p. none are true When a firm is healthy, is it possible to predict how claimant coalitions are likely to form if the firm were to fall into financial distress? a. yes, look at the set of contracts and determine what each claimant stands to gain or lose under the predicted conditions of financial distress b. no, each situation is to unique c. yes, look at how coalitions have formed in the past when a corporation has fallen into financial distress d. yes, this is an important method of using agency theory to study how to make better contracts e. A and B f. A and C g. A and D h. B and C i. B and D j. C and D k. all but A l. all but B m all but C . n. all but D o. all are true p. none are true If there is no asymmetric information, can there be an agency problem? a. yes b. no c. having no asymmetric information is like having perfect monitoring d. agency problems are the root cause of asymmetric information e. A and B f. A and C g. A and D h. B and C i. B and D j. C and D k. all but A l. all but B m all but C . n. all but D o. all are true p. none are true Moral hazard a. is an ethical violation b. is a legal violation c. is an opportunity for an agent to take unobserved actions for personal benefit at the expense of the principal d. is a moral violation e. A and B f. A and C g. A and D h. B and C i. B and D j. C and D k. all but A l. all but B m all but C . n. all but D o. all are true A firm has total liabilities of $45 million and owners' equity of $55 million, so that it has $100 million in total assets, $30 million of which are in cash. If the firm unexpectedly decides to undertake a new investment project and uses $25 million of its cash to acquire manufacturing equipment a. the firm's debt will become riskier b. the firm's equity will become riskier c. the firm's assets will become riskier d. this would be asset substitution e. A and B f. A and C g. A and D h. B and C i. B and D j. C and D k. all but A l. all but B m all but C . n. all but D o. all are true p. none are true A journalist once looked at several US corporation balance sheets and said: "I see why US corporations have so much trouble: Their debt is often bigger than their equity, so they owe more than have." a. this is correct b. this is nonsense c. we need more investigative journalists like this one d. the journalist needs to take a basic accounting class e. A and B f. A and C g. A and D h. B and C i. B and D j. C and D k. all but A l. all but B m all but C . n. all but D o. all are true p. none are true A hedge fund is considering making a 5-year $600,000, 9.5% APR, interest-only loan. They will get monthly interest payments and the entire principal at the end of 5 years. Before making the loan, it will cost the fund $20,000 for due diligence, and after making the loan, it will cost the fund $500 per month for monitoring. Based on only the information above (to be even more clear, ignoring taxes), and assuming the borrower makes all the required payments on time, what APY interest rate does the fund expect to earn? Please show work