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.

Grasp the concept of ethical intensity and its factors influencing ethical decision making.

Understand the definition, importance, and responsibility of stakeholders in an organization.

Comprehend the concepts of procedural justice and interactional justice, and their application in performance reviews.

Identify and understand the two types of sexual harassment and the essential components of a harassment policy.

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Definitions:

Assign

The act of transferring rights or responsibilities from one party to another, often seen in contracts, leases, and other legal agreements.

Term Deposit

A financial investment where money is locked away for a fixed period of time, earning interest, and can only be withdrawn after the term ends without penalty.

Negligent Misrepresentation

An incorrect or false statement of fact, made without the required care, that misleads the recipient thus causing injury.

Fraudulent Misrepresentation

A false statement of fact made knowingly, or without belief in its truth, or recklessly, intending another party to act upon it, resulting in loss.