Which of the Following Statements Is False

question 16

Multiple Choice

Which of the following statements is false?

• A) Once investors know the recap will occur, the share price will rise immediately to a level that reflects the value of the interest tax shield that the firm will receive from its recapitalization.
• B) When securities are fairly priced, the original shareholders of a firm capture the full benefit of the interest tax shield from an increase in leverage.
• C) In the presence of corporate taxes, we do not include the interest tax shield as one of the firm's assets on its market value balance sheet.
• D) We can analyze the recapitalization using the market value balance sheet; it states that the total market value of a firm's securities must equal the total market value of the firm's assets.

---

Definitions:

B Data

Behavioral Data or B Data refers to observable and measurable actions or reactions of an individual, often used in psychological studies.

Industrial Psychology

A field of psychology that applies psychological theories and principles to organizations, focusing on workplace behavior and how to improve productivity and well-being.

Experimental Psychologist

A scientist who studies the mind and behavior by conducting experiments under controlled conditions to identify relationships between variables.

S Data

Solicited feedback or personal accounts used in psychological assessments or research.