Which of the Following Statements Is FALSE

question 20

Multiple Choice

Which of the following statements is FALSE?

• A)The levered equity return equals the unlevered return,plus an extra "kick" due to leverage.
• B)By holding a portfolio of the firm's equity and its debt,we can replicate the cash flows from holding its levered equity.
• C)The cost of capital of levered equity is equal to the cost of capital of unlevered equity plus a premium that is proportional to the market value debt-equity ratio.
• D)If a firm is unlevered,all of the free cash flows generated by its assets are available to be paid out to its equity holders.

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Definitions:

Expected Frequency

The anticipated count of occurrences in a category or group based on probabilities.

Type A

Often refers to a personality type characterized by high levels of competitiveness, self-imposed stress, and a sense of urgency.

Expected Frequency

The anticipated count of occurrences in each category of a statistical distribution, as predicted by a null hypothesis.

Police Job

Refers to occupations within the law enforcement sector, involving enforcing laws, maintaining public order, and providing community services.