Which of the Following Statements Is FALSE

question 19

Multiple Choice

Which of the following statements is FALSE?

• A) The relative proportions of debt, equity, and other securities that a firm has outstanding constitute its capital structure.
• B) The project's net present value (NPV) represents the value to the new investors of the firm created by the project.
• C) When corporations raise funds from outside investors, they must choose which type of security to issue.
• D) The most common choices are financing through equity alone and financing through a combination of debt and equity.

---

Definitions:

Capital Acquisitions

The act of obtaining capital assets through purchase, lease, or other means, aimed at increasing the overall value of a business.

Marginal Tax

The tax rate applicable to the last unit of currency earned, indicating the rate at which additional income is taxed.

Tax Rate

The percentage at which income or corporate profits are taxed by the government.

Book Values

The net value of a company's assets as recorded on the balance sheet, calculated by subtracting liabilities from the total assets.