3. Which of the following statements is incorrect?
(A) When agency costs are significant, short-term debt may be the most attractive form of external financing.
(B)Too much debt can motivate managers and equity holders to take excessive risks or over-invest in a firm.
(C) Too much debt can motivate managers and equity holders to under-invest in a firm.
(D) Firms with high R&D costs and future growth opportunities typically maintain high debt levels.
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