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.

---

Definitions:

Aerobic Respiration

A process of energy production in cells involving oxygen to break down food molecules and produce ATP.

Muscle Pigment

Substances produced in the body that give color to muscle tissues, such as myoglobin, which is responsible for the red and brown colors of muscles.

Myoglobin

A protein in muscle cells that binds oxygen, providing a reserve supply of oxygen within muscles.

Muscular Disorder

A variety of diseases that affect the muscular system, impairing muscle strength, flexibility, and function.