Which of the Following Statements Is FALSE

question 50

Multiple Choice

Which of the following statements is FALSE?

• A)Since the publication of their original paper,Modigliani and Miller's ideas have greatly influenced finance research and practice.
• B)Proposition I was one of the first arguments to show that the Law of One Price could have strong implications for security prices and firm values in a competitive market;it marks the beginning of the modern theory of corporate finance.
• C)The conservation of value principle applies only to questions of debt versus equity or capital structure.
• D)The conservation of value principle for financial markets states that with perfect capital markets,financial transactions neither add nor destroy value,but instead represent a repackaging of risk (and therefore return).

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Definitions:

Statutory

Related to, or created by, statutes, which are laws enacted by a legislative body.

Mechanic's Lien

A legal claim against a property for unpaid work or supplies, giving workers and suppliers a form of security for their investment.

Homeowner

An individual who owns and resides in a house or property.

Contractor

An individual or company that enters into a contract to perform services or provide goods for another party in exchange for compensation.