QUESTION 5 Which one of the following statements is TRUE? O Firms borrowing money have greater flexibility to use that money when there are debt covenants. Lenders can't legally prevent a firm from engaging in asset switching. When an owner/manager sells stock to an outsider, that outsider now bears some of the costs of the owner/manager's perquisite consumption. When lenders protect themselves from the risk of asset switching, the firm's WACC can decrease. A lender calling in a corporate loan and then lending the funds out to a safer borrower is an example of asset switching