Which of the Following Statements Is FALSE

question 70

Multiple Choice

Which of the following statements is FALSE?

• A)Rather than set debt according to a target debt-equity ratio or interest coverage level,a firm may adjust its debt according to a fixed schedule that is known in advance.
• B)When we relax the assumption of a constant debt-equity ratio,the equity cost of capital and WACC for a project will change over time as the debt-equity ratio changes.
• C)When we relax the assumption of a constant debt-equity ratio,the APV and FTE methods are difficult to implement.
• D)If a firm is using leverage to shield income from corporate taxes,then it will adjust its debt level so that its interest expenses grow with its earnings.

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Definitions:

Questionnaires

A research instrument consisting of a series of questions and other prompts for the purpose of gathering information from respondents, widely used in surveys and studies.

Focus Groups

A qualitative research method where a small group of people discuss certain topics under the guidance of a moderator, used for exploring perceptions and opinions.

Interviews

A method of gathering information, feedback, or data by asking questions directly to individuals in a one-on-one or small group setting.

Kirkpatrick Model Of Evaluation

A framework for evaluating training programs, consisting of four levels: Reaction, Learning, Behavior, and Results.