Which of the Following Statements Is FALSE

question 17

Multiple Choice

Which of the following statements is FALSE?

• A)Even after adjusting for personal taxes,the value of an unlevered firm exceeds the value of a levered firm,and there is a tax advantage to using debt financing.
• B)In Modigliani and Miller's setting of perfect capital markets,firms could use any combination of debt and equity to finance their investments without changing the value of the firm.
• C)When firms raise new capital from investors,they do so primarily by issuing debt.
• D)In most years aggregate equity issues are negative,meaning that firms are reducing the amount of equity outstanding by buying shares.

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Definitions:

Revenue Journal

An accounting journal dedicated to recording the sales of goods or services on credit, tracking revenue transactions separate from cash and other transactions.

Cell Phone Covers

Cell Phone Covers are protective and decorative accessories designed to encase and safeguard mobile phones.

Cash Payments Journal

An accounting journal used to record all cash payments made by a company, including expenses and purchases.

Prepaid Insurance

Payments made for insurance coverage that has not yet been incurred, recorded as an asset on the balance sheet.