Which of the Following Statements Is FALSE

question 52

Multiple Choice

Which of the following statements is FALSE?

• A)When a firm issues new shares that account for a significant percentage of its outstanding shares,the transaction is called a leveraged recapitalization.
• B)MM Proposition I applies to capital structure decisions made at any time during the life of the firm.
• C)By choosing positive-NPV projects that are worth more than their initial investment,the firm can enhance its value.
• D)Holding fixed the cash flows generated by the firm's assets,however,the choice of capital structure does not change the value of the firm.

---

Definitions:

Dividend

A portion of a company's earnings distributed to its shareholders, typically in the form of cash payments or additional shares.

Recorded Income

The income that has been officially entered into the financial records of a company during a specific time period.

Acquisition Method

An accounting technique used during business combinations, where the acquirer records the assets acquired and liabilities assumed at their fair values at the acquisition date.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets.