Which of the Following Statements Is FALSE

question 49

Multiple Choice

Which of the following statements is FALSE?

• A)The money taken in by the firm as a result of the share issue exactly offsets the dilution of the shares.
• B)Most analysts prefer to use performance measures and valuation multiples that are based on the firm's earnings before interest has been deducted.
• C)Because the firm's earnings per share and price-earnings ratio are affected by leverage implies that we can always reliably compare these measures across firms with different capital structures.
• D)In general,as long as the firm sells the new shares of equity at a fair price,there will be no gain or loss to shareholders associated with the equity issue itself.

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Definitions:

Average Variable Costs

The sum of all costs that change with production volume, divided by the number of units produced.

Drones

Unmanned aerial vehicles (UAVs) controlled by remote pilots or autonomously by onboard computers, used for various purposes including surveillance, delivery, and photography.

Average Variable Costs

Costs that vary with the level of output produced, divided by the quantity of output produced.

Drones

Unmanned aerial vehicles (UAVs) that can be remotely controlled or fly autonomously through software-controlled flight plans in their embedded systems.