Which of the Following Statements Is False

question 45

Multiple Choice

Which of the following statements is false?

• A) In perfect capital markets, buying and selling securities is a zero-NPV transaction, so it should not affect firm value.
• B) Making positive-NPV investments will create value for the firm's investors, whereas saving the cash or paying it out will not.
• C) In perfect capital markets, if a firm invests excess cash flows in financial securities, the firm's choice of payout versus retention is irrelevant and does not affect the initial share price.
• D) After adjusting for investor taxes, there remains a substantial tax advantage for the firm to retain excess cash.

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Definitions:

Choiceboard

A choiceboard is an interactive online system that allows consumers to customize products or services according to their preferences before making a purchase.

Online Configurator

A digital tool allowing customers to customize the features or components of a product according to their preferences before purchasing.

Product Attributes

The characteristics, features, and qualities that define a specific product.

Interactive Marketing

A type of marketing where brands engage in a two-way communication with consumers, typically through digital platforms, to create a more personalized and engaging experience.