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:

Habituation Tasks

Experiments designed to measure how infants and young children decrease their response to a repeated stimulus over time.

Information-Processing Capacities

The abilities of the brain to take in, store, and use information, influencing how knowledge is acquired and utilized.

Expressive Abilities

Refer to the capacity of individuals to communicate thoughts, feelings, and ideas through various forms such as speech, writing, art, or gestures.

Infants

Young children from birth to one year of age, experiencing rapid developmental changes in physical, cognitive, and emotional aspects.