Which of the Following Statements Is False

question 20

Multiple Choice

Which of the following statements is false?

• A) With no debt, the WACC is equal to the unlevered equity cost of capital.
• B) With perfect capital markets, a firm's WACC is dependent of its capital structure and is equal to its equity cost of capital only the firm it is unlevered.
• C) As the firm borrows at the low cost of capital for debt, its equity cost of capital rises, but the net effect is that the firm's WACC is unchanged.
• D) Although debt has a lower cost of capital than equity, leverage does not lower a firm's WACC.

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Definitions:

Sleep Disorders

A range of conditions that affect the ability to sleep well on a regular basis, impacting one's physical health, emotional well-being, and safety.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, which is a comprehensive classification and diagnostic tool used by mental health professionals.

Substance Abuse Disorder

A medical condition characterized by the compulsive use of substances despite harmful consequences, leading to significant impairment or distress.

Insomnia

A condition that disrupts normal sleep patterns, making it hard to fall asleep, remain asleep, or achieve restful sleep.