Which of the Following Statements Is FALSE

question 95

Multiple Choice

Which of the following statements is FALSE?

• A)Even though firms have not issued new equity,the market value of equity has risen over time as firms have grown.
• B)While firms seem to prefer debt when raising external funds,not all investment is externally funded.
• C)To receive the full tax benefits of leverage a firm needs to use 100% debt financing.
• D)If bankruptcy is costly,these costs might offset the tax advantages of debt financing.

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Definitions:

Premises

Statements or reasons offered in support of a conclusion in an argument, serving as the foundation for the logical structure.

Major Term

In a syllogism, the predicate of the conclusion that appears in one of the premises.

Conclusion

The final part of an argument, statement, or process that follows logically from the premises or conditions.

Major Premise

The first proposition in a syllogistic argument, which contains the major term (the predicate of the conclusion) and makes a general statement.