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:

Power to Change

The ability or capacity to make or bring about significant alterations or modifications.

Veterans Programs

Initiatives designed to support military veterans with education, health care, employment, and other benefits.

War in Afghanistan

A prolonged conflict that began in 2001 involving various factions within Afghanistan and international forces, primarily led by the United States.

Medical Degree

An academic degree awarded to individuals who have completed studies in the field of medicine, qualifying them to practice as doctors.