Which of the following two statements is correct?

S1: Based on trade-off theory, the expected costs of bankruptcy are the product of the probability of the firm going bankrupt and the costs that will be incurred if the firm goes bankrupt.

S2: Holding all else constant, based on trade-off theory, firms with higher expected bankruptcy costs should have more debt in their capital structures.

Group of answer choices

Both statements are correct

Both statements are false

S1 is correct but S2 is false

S2 is correct but S1 is false