Which of the Following Statements Is FALSE

question 67

Multiple Choice

Which of the following statements is FALSE?

• A)The value of a firm is equal to the amount of money the firm can raise by issuing securities.
• B)By reducing a firm's corporate tax liability,debt allows the firm to pay more of its cash flows to investors.
• C)Equity investors must pay taxes on dividends but not capital gains.
• D)For individuals,interest payments received from debt are taxed as income.

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Definitions:

Current Assets

Assets that a company expects to convert into cash, sell, or consume within one year or its operating cycle, whichever is longer.

Current Liabilities

Short-term financial obligations that are due within one year or within the entity's operating cycle.

Current Ratio

A liquidity ratio that measures a company’s ability to pay short-term obligations with its current assets.

Interim Financial Statements

Financial reports that cover a period shorter than a fiscal year, usually quarterly or semi-annually, providing insights into a company's financial status throughout the year.