Which of the Following Statements Is FALSE

question 53

Multiple Choice

Which of the following statements is FALSE?

• A)With no debt,the WACC is equal to the unlevered equity cost of capital.
• B)With perfect capital markets,a firm's WACC is dependent of its capital structure and is equal to its equity cost of capital only the firm it is unlevered.
• C)As the firm borrows at the low cost of capital for debt,its equity cost of capital rises,but the net effect is that the firm's WACC is unchanged.
• D)Although debt has a lower cost of capital than equity,leverage does not lower a firm's WACC.

Understand the concept and implications of raiders in corporate governance.

Recognize the importance of director rights, such as the right to inspect corporate books and records.

Grasp the various methods of voting and their impact on shareholder representation and control.

Understand the concept and examples of artificial selection and its impact on species.

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Definitions:

Effectiveness

The degree to which something is successful in producing a desired or intended result.

Regression Toward The Mean

The statistical phenomenon that extreme values in a data set are likely to be followed by more central, less extreme values.

Trait Scoring

A method used in psychology to quantify individual characteristics or traits, often through questionnaires or assessments.

Law Of Averages

A principle that suggests events with equal probability of occurring will tend to even out over time, but often misinterpreted as a belief that a particular outcome is due.