Which of the Following Statements Is False

question 29

Multiple Choice

Which of the following statements is false?

• A) Given a forecast of future interest payments, we can determine the interest tax shield and compute its present value by discounting it at a rate that corresponds to its risk.
• B) The total value of the unlevered firm exceeds the value of the firm with leverage due to the present value of the tax savings from debt.
• C) To compute the increase in the firm's total value associated with the interest tax shield, we need to forecast how a firm's debt-and therefore its interest payments-will vary over time.
• D) There is an important tax advantage to the use of debt financing.

---

Definitions:

Last Stage

The final phase in a process or life cycle, often implying a conclusion or the end of growth.

Final Stage

The last phase or part of a process, often implying the culmination or conclusion of something.

Maturity

The state or quality of being fully grown or developed, often characterized by emotional stability and the ability to respond to situations in an appropriate manner.

Ego Integrity

Ego integrity is a sense of fulfillment and completeness that individuals might feel during the later stages of their life, reflecting on their life as meaningful.