Which of the Following Statements Is FALSE

question 36

Multiple Choice

Which of the following statements is FALSE?

• A)In perfect capital markets,buying and selling securities is a zero-NPV transaction,so it should not affect firm value.
• B)Making positive-NPV investments will create value for the firm's investors,whereas saving the cash or paying it out will not.
• C)In perfect capital markets,if a firm invests excess cash flows in financial securities,the firm's choice of payout versus retention is irrelevant and does not affect the initial share price.
• D)After adjusting for investor taxes,there remains a substantial tax advantage for the firm to retain excess cash.

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Definitions:

Network Adapter

A device that enables a computer to communicate over a network, converting digital data into a format that can be transmitted over the network.

MAN

Metropolitan Area Network, a network that spans a larger geographic area than a LAN but is usually confined to a single city or metropolitan area.

Data Packets

Units of data made into a single package that travels along network paths to its destination.

Access Point

A hardware device that allows wireless devices to connect to a wired network using Wi-Fi, Bluetooth, or similar standards.