Which of the Following Statements Is Correct

question 211

Multiple Choice

Which of the following statements is correct?

• A) Decisions regarding a firm's debt and equity can be called capital budgeting decisions.
• B) The asset beta is a measure of the unsystematic risk of a firm's assets.
• C) In a purely capital restructuring, the composition of the assets of the firm will change.
• D) The value of the overall firm will not change as a result of a capital restructuring unless the NPV of the restructuring is negative.
• E) The use of personal leverage by an investor to alter the degree of financial leverage of a firm is called homemade leverage.

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Definitions:

Assets

Economic resources owned or controlled by a business or individual, which are expected to produce value or benefit in the future.