Use the following statements to answer this question:

I. Debtholders and residual claimholders benefit from the constant increase in the corporation asset value.

II. Collateral in addition to covenants are used in residual claimholders and debtholders contracts as a protection to insure claims against corporate cash flows.

Select one:

a.Both I and ll are correct.

b. Both I and I are incorrect.

c.I is correct and Il is incorrect.

d. I is incorrect and Il is correct.