Which one of the following statements is TRUE?

a. When lenders protect themselves from the risk of asset switching, the firm's WACC can decrease.

b. Lenders can't legally prevent a firm from engaging in asset switching.

c. A lender calling in a corporate loan and then lending the funds out to a safer borrower is an example of asset switching.

d. When an owner/manager sells stock to an outsider, that outsider now bears some of the costs of the owner/manager's perquisite consumption.

e. Firms borrowing money have greater flexibility to use that money when there are debt covenants.