Which of the Following Statements Is False

question 86

Multiple Choice

Which of the following statements is false?

• A) Firms with high R&D costs and future growth opportunities typically maintain high debt levels.
• B) The tradeoff theory explains how firms should choose their capital structures to maximize value to current shareholders.
• C) With tangible assets, the financial distress costs of leverage are likely to be low, as the assets can be liquidated for close to their full value.
• D) Proponents of the management entrenchment theory of capital structure believe that managers choose a capital structure to avoid the discipline of debt and maintain their own job security.

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Definitions:

Ethical Crisis Management

The process of handling emergencies or disasters by making decisions that align with moral and ethical standards.

Integrity

The quality of being honest and having strong moral principles, or the state of being whole and undivided.

Diversity

Refers to the variety and representation of different characteristics such as ethnicity, gender, age, sexual orientation, and disability among individuals within a group or organization.

Organizational Behavior

The study of how individuals and groups act within corporate environments, aiming to improve organizational efficiency and employee well-being.