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Which of the following statements best describes the reasons for the effects of including financial ratio-based covenants in debt contracts? Select one: a. Covenants arise

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Which of the following statements best describes the reasons for the effects of including financial ratio-based covenants in debt contracts? Select one: a. Covenants arise because of the moral hazard problem. O b. Covenants increase the borrower's cost of borrowing. O c. Covenants decrease managers' concerns about the volatility of earnings. d. Covenants arise because of the adverse selection

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