Which of the Following Statements Is FALSE

question 18

Multiple Choice

Which of the following statements is FALSE?

• A)Given a forecast of future interest payments,we can determine the interest tax shield and compute its present value by discounting it at a rate that corresponds to its risk.
• B)The total value of the unlevered firm exceeds the value of the firm with leverage due to the present value of the tax savings from debt.
• C)To compute the increase in the firm's total value associated with the interest tax shield,we need to forecast a firm's debt and its interest payments.
• D)There is an important tax advantage to the use of debt financing.

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Definitions:

Quality

Evaluating the caliber of an object by comparing it to its counterparts; the highness of its excellence.

Quantity

The amount or number of a material or immaterial thing not requiring a unit of measurement.

Quality

The degree of excellence or superiority of something, often measured against other similar things.

Open Sentence

In predicate logic, a statement with a free variable.