Which of the Following Statements Is False

question 26

Multiple Choice

Which of the following statements is false?

• A) Leverage decreases the risk of the equity of a firm.
• B) Because the cash flows of the debt and equity sum to the cash flows of the project, by the Law of One Price the combined values of debt and equity must be equal to the cash flows of the project.
• C) Franco Modigliani and Merton Miller argued that with perfect capital markets, the total value of a firm should not depend on its capital structure.
• D) It is inappropriate to discount the cash flows of levered equity at the same discount rate that we use for unlevered equity.

---

Definitions:

State Visits

Formal visits by a head of state to another country, characterized by ceremonial events and discussions on diplomatic relations.

Decorating War Heroes

The act of awarding military decorations and honors to soldiers and veterans who have demonstrated exceptional service and bravery.

Head of State

The official representative of a country in diplomatic matters, who may also have executive or ceremonial duties, depending on the country's system of government.

Treaties

Formal agreements between countries that are legally binding and govern international relations.