Which of the Following Statements Is False

question 4

Multiple Choice

Which of the following statements is false?

• A) When a firm issues new shares that account for a significant percentage of its outstanding shares, the transaction is called a leveraged recapitalization.
• B) MM Proposition I applies to capital structure decisions made at any time during the life of the firm.
• C) By choosing positive-NPV projects that are worth more than their initial investment, the firm can enhance its value.
• D) Holding fixed the cash flows generated by the firm's assets, however, the choice of capital structure does not change the value of the firm.