The APV Method Is Comprised of the All Equity NPV

question 38

Multiple Choice

The APV method is comprised of the all equity NPV of a project and the NPV of financing effects. The four side effects are:

• A)tax subsidy of dividends, cost of issuing new securities, subsidy of financial distress and
• Cost of debt financing.
• B)cost of issuing new securities, cost of financial distress, tax subsidy of debt and subsidies
• To debt financing.
• C)cost of issuing new securities, cost of financial distress, tax subsidy of dividends and cost
• Of debt financing.
• D)subsidy of financial distress, tax subsidy of debt, cost of other debt financing and cost of
• Issuing new securities.
• E)None of the above.

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