Which of the Following Statements Is False

question 67

Multiple Choice

Which of the following statements is false?

• A) Personal taxes have the potential to offset some of the corporate tax benefits of leverage.
• B) The actual interest tax shield depends on the reduction in the total taxes (both corporate and personal) that are paid.
• C) The amount of money an investor will pay for a security ultimately depends on the benefits the investor will receive-namely, the cash flows the investor will receive before all taxes have been paid.
• D) Just like corporate taxes, personal taxes reduce the cash flows to investors and diminish firm value.

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Definitions:

Domain

The domain of a function is the set of all possible input values (usually x-values) for which the function is defined.

Real Numbers

All the numbers on the number line, including rational and irrational numbers, but not imaginary numbers.

Radical Expression

An expression that includes a radical symbol, which indicates the root of a number.

Simplify

The process of making an expression or equation easier to work with, by reducing it to its most basic form.