Which of the Following Statements Is FALSE

question 71

Multiple Choice

Which of the following statements is FALSE?

• A)As long as investors can borrow or lend at the same interest rate as the firm,homemade leverage is a perfect substitute for the use of leverage by the firm.
• B)When investors use leverage in their own portfolios to adjust the leverage choice made by the firm,we say that they are using homemade leverage.
• C)The value of the firm is determined by the present value of the cash flows from its current and future investments.
• D)The investor can re-create the payoffs of unlevered equity by borrowing and using the proceeds to purchase the equity of the firm.

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Definitions:

Existing Customs

Traditions or practices that have been established over time within a particular culture or society.

Family Planning Policy

Government policies designed to control the population size by regulating birth rates, often including measures such as contraception and education.

Prenatal Care

Medical and healthcare provided to expectant mothers during pregnancy to ensure the health of both the mother and the fetus.

Births Spacing

The practice or policy of controlling the interval between the birth of children in a family.