Question $20$

Which of the following statements is CORRECT?

a$.$ Managerial compensation plans cannot be used to reduce potential conflicts between stockholders and managers.

b$.$ The threat of takeovers tends to reduce potential conflicts between stockholders and managers.

c$.$ One of the ways in which firms can mitigate or reduce potential conflicts between bondholders and stockholders is by increasing the amount of debt in the firm's capital structure.

d$.$ The creation of the Securities and Exchange Commission $($SEC$)$ has eliminated conflicts between managers and stockholders.