Using the stock as an option view, describe the problem of claim dilution.

Multiple choices are:

it reduces debtholder value by increasing the ratio of debt-to-asset value

claim dilution via dividends reduces the value of the assets supporting the debt

claim dilution via new debt reduces the ratio of debt to the value of the assets supporting the debt

increasing the ratio of debt to asset value increases the debtholders risk

A and B

A and C

A and D

B and C

B and D

C and D

all but A

all but B

all but C

all but D

all are true