Which of the Following Statements Is False

question 11

Multiple Choice

Which of the following statements is false?

• A) Even though firms have not issued new equity, the market value of equity has risen over time as firms have grown.
• B) While firms seem to prefer debt when raising external funds, not all investment is externally funded.
• C) To receive the full tax benefits of leverage a firm needs to use 100% debt financing.
• D) If bankruptcy is costly, these costs might offset the tax advantages of debt financing.

---

Definitions:

Fibrocartilage

A type of cartilage characterized by thick bundles of collagen fibers, found in areas requiring tough support or capable of withstanding heavy pressure, such as intervertebral discs.

Elastic Cartilage

A type of cartilage that contains elastic fiber networks and collagen fibers, providing strength and elasticity, found in the ear and epiglottis.

Loose Connective Tissue

A type of connective tissue characterized by a loosely organized matrix, which supports, binds together, and provides nutrients to surrounding tissues.

Elastic Tissue

A type of connective tissue that allows tissues in the body to resume their shape after stretching or contracting.