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.

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Definitions:

Gag Reflex

An involuntary reflex contraction of the back of the throat, evoked by touching the roof of the mouth, back of the tongue, area around the tonsils, or the back of the throat.

Difficulty Swallowing

A condition, medically known as dysphagia, characterized by discomfort or challenges in swallowing food or liquids.

Accessory Nerve

A cranial nerve that innervates the sternocleidomastoid and trapezius muscles, facilitating shoulder, neck, and head movement.

Oculomotor Nerve

The third cranial nerve that controls most of the eye's movements, the constriction of the pupil, and maintains an open eyelid.