ALL OF THE FOLLOWING ARE TRUE REGARDING FINANCIAL SLACK, EXCEPT A...

125. All of the following are true regarding financial slack, EXCEPT a. It can reduce managers’ incentives to find ways to make the company operate more cost-effectively b. It develops when a company chooses not to pay out dividends from its free cash flow c. It will lead to lower agency costs d. Management might be tempted to indulge in perks for themselves