Which of the Following Statements Is False

question 64

Multiple Choice

Which of the following statements is false?

• A) Even after adjusting for personal taxes, the value of an unlevered firm exceeds the value of a levered firm, and there is a tax advantage to using debt financing.
• B) In Modigliani and Miller's setting of perfect capital markets, firms could use any combination of debt and equity to finance their investments without changing the value of the firm.
• C) When firms raise new capital from investors, they do so primarily by issuing debt.
• D) In most years aggregate equity issues are negative, meaning that firms are reducing the amount of equity outstanding by buying shares.

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Definitions:

Kg

A unit of mass equal to 1,000 grams or approximately 2.20462 pounds, used in the metric system.

Tid Pc

A medical abbreviation meaning three times a day after meals.

Stat

An abbreviation for the term "statim," meaning immediately or without delay, often used in medical contexts.