Which of the following statements is FALSE?

A. The separation of ownership and control creates the possibility of management entrenchment; facing little threat of being fired and replaced, managers are free to run the firm in their own best interests.

B. One disadvantage of using leverage is that it does not allow the original owners of the firm to maintain their equity stake.

C. Managers also have their own personal interests, which may differ from those of both equity holders and debt holders.

D. The costs of reduced effort and excessive spending on perks are another form of agency cost.