Your foodservice firm has large amounts of debt that it will likely be unable to pay, and management just decided not to renew a modestly but reliably profitable contract with the local school district. This is likely because:

a.Bondholders would prefer that the firm liquidate

b. Shareholders dont want to pay the upfront costs if most of the profits will go to bondholders

c. Bondholders would prefer a high risk, high reward project

d. The incentives of shareholders and managers no longer align