Which of the Following Statements Is False

question 4

Multiple Choice

Which of the following statements is false?

• A) The most important insight regarding capital structure goes back to Modigliani and Miller: with perfect capital markets, a firm's security choice alters the risk of the firm's equity, but it does not change its value or the amount it can raise from outside investors.
• B) When agency costs are significant, short-term debt may be the most attractive form of external financing.
• C) Too much debt can motivate managers and equity holders to take excessive risks or over-invest in a firm.
• D) Of all the different possible imperfections that drive capital structure, the most clear-cut, and possibly the most significant, is taxes.

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Definitions:

Aortic Area

An anatomical region of the chest where the aorta is closest to the chest wall, often used in cardiovascular assessments.

Apical Pulse

The measurement of the heart rate at the apex of the heart, typically done through auscultation with a stethoscope placed on the chest.

Mitral Areas

Refers to the region of the chest over the heart where the mitral valve can best be heard; often crucial in diagnosing heart conditions.

Apical Pulse

The pulse measured at the apex of the heart, typically listened to with a stethoscope at the chest wall, used to assess heart function.