Which of the Following Statements Is FALSE

question 97

Multiple Choice

Which of the following statements is FALSE?

• A)Firms with high R&D costs and future growth opportunities typically maintain high debt levels.
• B)The tradeoff theory explains how firms should choose their capital structures to maximize value to current shareholders.
• C)With tangible assets,the financial distress costs of leverage are likely to be low,as the assets can be liquidated for close to their full value.
• D)Proponents of the management entrenchment theory of capital structure believe that managers choose a capital structure to avoid the discipline of debt and maintain their own job security.

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Definitions:

President Donald Trump

The 45th President of the United States, who served from January 20, 2017, to January 20, 2021, known for his business background and controversial policies.

President Barack Obama

The 44th President of the United States, serving two terms from 2009 to 2017, known for being the first African American to hold the office.

Fifth Amendment

A provision in the U.S. Constitution that guarantees several protections for individuals, including against self-incrimination and double jeopardy, and ensures due process.

Fourth Amendment

A part of the U.S. Constitution that guards against unreasonable searches and seizures, alongside requiring any warrant to be judicially sanctioned and supported by probable cause.