Which of the following statement about the under-investment problem is INCORRECT?
A) The under-investment problem arises because of the conflicts of interest between a firm’s shareholders and debt holders.
B) The under-investment problem arises because the benefits go to debt holders but shareholders must put up new funds.
C) The under-investment problem arises when the firm faces financial distress.
D) The under-investment problem refers to that the managers do not exert efforts to create valuable projects and thus invest too small.