Which of the following statement is correct? Additional debts can increase agency cost by making managers to be risk-averse and avoid undertaking risky but positive NPV project. Additional debts can reduce agency costs because it pre-commits the cashflow for interest expense and managers are less likely to waste the cashflow on non- productive project. Company with higher proportion of fixed cost relative to variable cost has greater operating leverage. Managers would not issue additional equity if they thought the current stock price was less than the true value of the stock given their inside information. O All the answers are correct