Which of the following are ways a firm can reduce cash flows to prevent managers from wastefully spending excess cash flow? Select all that apply.
a) Pay its excess cash flows to the shareholders in the form of higher dividends
b) increase the amount of debt in the firm's target capital structure in the hope that higher debt-service requirements will force managers to be more disciplined
c) Funnel excess cash flows back to the shareholders through stock repurchases
d) minimize the amount of debt in the firm's capital structure so the firm will be able to borrow money at a reasonable rate when good investment opportunities arise
e) distribute excess funds to the firm's bondholders by paying more interest expense than it is legally obligated to pay.