Which of the Following Statements Is FALSE

question 56

Multiple Choice

Which of the following statements is FALSE?

• A)The most important insight regarding capital structure goes back to Modigliani and Miller: With perfect capital markets,a firm's security choice alters the risk of the firm's equity,but it does not change its value or the amount it can raise from outside investors.
• B)When agency costs are significant,short-term debt may be the most attractive form of external financing.
• C)Too much debt can motivate managers and equity holders to take excessive risks or over-invest in a firm.
• D)Of all the different possible imperfections that drive capital structure,the most clear-cut,and possibly the most significant,is taxes.

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Definitions:

Marcel Duchamp

A French-American artist associated with Dadaism and Surrealism, known for his innovative contributions to art, including the concept of the readymade.

Hannah Höch

Hannah Höch was a German Dada artist known for her work in photomontage, creating insightful and often critical pieces related to societal issues.

Unique Forms

Distinctive or one-of-a-kind shapes, patterns, or arrangements that set something apart from the rest.

Continuity in Space

A concept related to the Futurist movement, specifically in sculpture, focusing on capturing dynamic movement and the fluidity of forms in space.