Which of the following statements about debt is false? I. Interest pa

Which of the following statements about debt is false?

I. Interest payments reduce the scope for waste by management.
II. Debt creates the possibility of bankruptcy.
III. Debt increases the tendency of shareholders to take gambles.
IV. Debt reduces the cash flows that go to government.
A) I
B) II
C) III
D) IV
E) None of the statements are false.

ANSWER

E