Which of the Following Statements Is False

question 64

Multiple Choice

Which of the following statements is false?

• A) Even after adjusting for personal taxes, the value of an unlevered firm exceeds the value of a levered firm, and there is a tax advantage to using debt financing.
• B) In Modigliani and Miller's setting of perfect capital markets, firms could use any combination of debt and equity to finance their investments without changing the value of the firm.
• C) When firms raise new capital from investors, they do so primarily by issuing debt.
• D) In most years aggregate equity issues are negative, meaning that firms are reducing the amount of equity outstanding by buying shares.

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Definitions:

Meta-Analysis

An analytical approach that merges outcomes from numerous scientific investigations to formulate a conclusive summary.

Mating Rituals

Mating rituals are behavioral patterns exhibited by animal species, including humans, to attract and select a mate.

North American Deer

A group of species including white-tailed deer and mule deer that are native to North America, known for their antlers that they shed and regrow annually.

Naturalistic Observation

A study method where participants are monitored in their usual surroundings with no alteration by the researcher.