Which of the Following Statements Is False

question 28

Multiple Choice

Which of the following statements is false?

• A)Most of the investment by non-financial companies is generally financed from internal cash flow.
• B)Some companies effectively have negative debt/equity ratios because their holdings of cash and marketable securities are greater than their debt.
• C)Wald (1999)found that differences in leverage between major industrial countries are moderate.
• D)Many studies of capital structure include measures of non-debt tax shields with the expectation that they will be positively related to leverage.

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Definitions:

Contributions

Contributions are amounts of money or resources given by individuals or entities to a common fund or cause, often for charity, investments, or pooling resources.

Investment

Allocation of resources, usually money, in expectation of a future financial return or benefit.

Ordinary Annuity

An annuity in which payments are made at the end of each period, such as monthly or annually, commonly found in loans and savings plans.

Compounded Annually

Interest calculation method where the interest is calculated once per year and added to the principal sum, affecting the calculation of future interest.