Which of the Following Statements Is FALSE

question 65

Multiple Choice

Which of the following statements is FALSE?

• A)Even after adjusting for personal taxes,the value of an unlevered firm exceeds the value of a levered firm,and there is no tax advantage to using debt financing.
• B)In Modigliani and Miller's setting of perfect capital markets,firms could use any combination of debt and equity to finance their investments without changing the value of the firm.
• C)When firms raise new capital from investors,they do so primarily by issuing debt.
• D)In most years aggregate equity issues are negative,meaning that firms are reducing the amount of equity outstanding by buying shares.

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Definitions:

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Guidelines or rules that are not mandatory but are suggested to facilitate effective operation and interaction within a group or meeting.

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Limits or targets, usually set by governments, on the quantity or value of goods that can be imported or exported.