The APV Method Is Comprised of the All-Equity NPV of a Project

question 37

Multiple Choice

The APV method is comprised of the all-equity NPV of a project plus the NPV of financing effects.The four financing side effects are:

• A)tax subsidy of dividends,cost of issuing new securities,subsidy of financial distress,and cost of debt financing.
• B)cost of issuing new securities,cost of financial distress,tax subsidy of debt,and other subsidies to debt financing.
• C)cost of issuing new securities,cost of financial distress,tax subsidy of dividends,and cost of debt financing.
• D)subsidy of financial distress,tax subsidy of debt,cost of other debt financing,and cost of issuing new securities.
• E)cost of financial distress,tax subsidy of debt,increased cost of equity capital,and cost of issuing new securities.

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