Which of the Following Statements Is FALSE

question 36

Multiple Choice

Which of the following statements is FALSE?

• A)In perfect capital markets,buying and selling securities is a zero-NPV transaction,so it should not affect firm value.
• B)Making positive-NPV investments will create value for the firm's investors,whereas saving the cash or paying it out will not.
• C)In perfect capital markets,if a firm invests excess cash flows in financial securities,the firm's choice of payout versus retention is irrelevant and does not affect the initial share price.
• D)After adjusting for investor taxes,there remains a substantial tax advantage for the firm to retain excess cash.

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Definitions:

Technical Skills

Specific abilities or expertise related to a particular field or industry, often requiring specialized knowledge or training.

Good Communicators

Individuals who effectively transmit and receive information, ideas, and feelings through verbal and non-verbal methods.

Misrepresentation

The act of giving a false or misleading account of the nature of something, often to deceive or mislead.

Artificial Testimonials

Fake or fabricated reviews and endorsements meant to mislead consumers about the quality or effectiveness of a product or service.