The APV Method Includes the NPV of a Project Assuming

question 65

Multiple Choice

The APV method includes the NPV of a project assuming all-equity financing and then adds in the NPV of financing effects. The financing effects are

• A)tax subsidy of dividends, cost of issuing new securities, subsidies of financial distress, and cost of debt financing.
• B)cost of issuing new securities, cost of financial distress, tax subsidy of debt, and other subsidies.
• C)cost of issuing new securities, cost of financial distress, tax subsidy of dividends, and cost of debt financing.
• D)subsidies of financial distress, tax subsidy of debt, cost of other debt financing, and cost of issuing new securities.

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