Question: Debt can be used to constrain managers because it: A. Provides additional cash flow for their use. B. Commits a firm's excess cash flow to

Debt can be used to constrain managers because it:

A. Provides additional cash flow for their use.

B. Commits a firm's excess cash flow to debt payment.

C. Allows the management to issue more shares.

D. Eliminates a CEO's tendency to acquire other firms without a sound economic rationale.

E. Makesa CEO more likely to accept positive NPV projects.

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