Which of the Following Statements Is False

question 23

Multiple Choice

Which of the following statements is false?

• A) The APV approach explicitly values the market imperfections and therefore allows managers to measure their contribution to value.
• B) We need to know the debt level to compute the APV, but with a constant debt-equity ratio we need to know the project's value to compute the debt level.
• C) The WACC method is more complicated than the APV method because we must compute two separate valuations: the unlevered project and the interest tax shield.
• D) Implementing the APV approach with a constant debt-equity ratio requires solving for the project's debt and value simultaneously.