Which of the Following Statements Is False

question 38

Multiple Choice

Which of the following statements is false?

• A) Aside from taxes, another important difference between debt and equity financing is that debt payments must be made to avoid bankruptcy, whereas firms have no similar obligation to pay dividends or realize capital gains.
• B) Increasing the level of debt increases the probability of bankruptcy.
• C) A firm receives a tax benefit only if it is paying taxes in the first place.
• D) To the extent that a firm has other tax shields, its taxable earnings will be increased and it will rely more heavily on the interest tax shield.

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Definitions:

Techniques

Specific methods or strategies applied in accomplishing a task or achieving a desired outcome.

Audience Understands

The extent to which the recipients of a message grasp its content and significance.

Reinforce Point

The act of emphasizing or strengthening a particular argument or idea within a discussion or presentation.

Expression Of Gratitude

A demonstration of thanks, appreciation, or acknowledgment, often communicated verbally or in writing.