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.

Calculate the social value of goods considering both external costs and benefits.

Evaluate the role of government incentives in resolving problems of externalities.

Understand the concept of private solutions to externalities, including the Coase theorem.

Illustrate how market-based policies can address both positive and negative externalities.

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Definitions:

Vincent Van Gogh

A post-impressionist painter from the Netherlands known for his vivid colors, emotional honesty, and bold brushwork, with works like "Starry Night" and "Sunflowers."

Pointillism

A system of painting devised by the 19th-century French painter Georges Seurat. The artist separates color into its component parts and then applies the component colors to the canvas in tiny dots (points). The image becomes comprehensible only from a distance, when the viewer’s eyes optically blend the pigment dots. Sometimes referred to as divisionism.

Painting Technique

The method or process used by an artist in the creation of a painting, including considerations of medium, brushwork, color application, and texture.

Georges Seurat

A French post-impressionist artist famous for developing the technique of pointillism, using tiny dots of color to create images.