Which of the Following Statements Is FALSE

question 41

Multiple Choice

Which of the following statements is FALSE?

• A)Aside from taxes,another important difference between debt and equity financing is that debt payments must be made to avoid bankruptcy,whereas firms have no similar obligation to pay dividends or realize capital gains.
• B)Increasing the level of debt increases the probability of bankruptcy.
• C)A firm receives a tax benefit only if it is paying taxes in the first place.
• D)To the extent that a firm has other tax shields,its taxable earnings will be increased and it will rely more heavily on the interest tax shield.

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Definitions:

Individual Courts

Specific courts within a judicial system, each of which may have unique authority, jurisdiction, or procedural rules.

Legal Fees

The charges or payments made for professional legal services provided by lawyers or law firms.

Initial Client Interview

The first meeting between a lawyer and a potential client to discuss the client's case, expectations, and legal strategy.

Paralegals

Trained legal professionals who assist attorneys in their work, performing tasks like legal research, drafting documents, and organizing files, but who are not themselves attorneys and thus cannot represent clients in court.