Which of the Following Statements Is FALSE

question 42

Multiple Choice

Which of the following statements is FALSE?

• A)Personal taxes have the potential to offset some of the corporate tax benefits of leverage.
• B)The actual interest tax shield depends on the reduction in the total taxes (both corporate and personal)that are paid.
• C)The amount of money an investor will pay for a security ultimately depends on the benefits the investor will receive-namely,the cash flows the investor will receive before all taxes have been paid.
• D)Just like corporate taxes,personal taxes reduce the cash flows to investors and diminish firm value.

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Definitions:

Representativeness Heuristic

A cognitive shortcut that involves making judgments based on how much one event resembles another event, often leading to bias in decision-making.

Occupation

A person's job or profession, often defining a large part of their identity and socioeconomic status.

Survey Data

Information collected from a sample of individuals through their responses to questions, used in research to infer about a larger population.

Whorf

Refers to Benjamin Lee Whorf, an American linguist known for his hypotheses about the relation between language, thought, and cultural perception.