Which of the Following Statements Is False

question 45

Multiple Choice

Which of the following statements is false?

• A) In perfect capital markets, buying and selling securities is a zero-NPV transaction, so it should not affect firm value.
• B) Making positive-NPV investments will create value for the firm's investors, whereas saving the cash or paying it out will not.
• C) In perfect capital markets, if a firm invests excess cash flows in financial securities, the firm's choice of payout versus retention is irrelevant and does not affect the initial share price.
• D) After adjusting for investor taxes, there remains a substantial tax advantage for the firm to retain excess cash.

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Definitions:

Residual Volume

The volume of air remaining in the lungs after a forced exhalation, ensuring gas exchange continues even between breaths.

Irrigation

The process of cleaning a wound or body part by flushing with water or a medical solution to remove debris and infections.

Nasogastric Irrigant

A solution used to flush or clear a nasogastric tube, which is a tube inserted through the nose down into the stomach.

Adult Patient

An individual receiving medical care who is beyond the age of adolescence and legally considered an adult in their respective jurisdiction.