Which of the Following Statements Is FALSE

question 91

Multiple Choice

Which of the following statements is FALSE?

• A)Given a 35% corporate tax rate,for every $1 in new permanent debt that the firm issues,the value of the firm increases by $0.65.
• B)The firm's marginal tax rate may fluctuate due to changes in the tax code and changes in the firm's income bracket.
• C)Many large firms have a policy of maintaining a certain amount of debt on their balance sheets.
• D)Typically,the level of future interest payments varies due to changes the firm makes in the amount of debt outstanding,changes in the interest rate on that debt,and the risk that the firm may default and fail to make an interest payment.

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Definitions:

Market Share

The portion of a market controlled by a particular company or product.

Flood Control System

involves infrastructure and strategic planning aimed at reducing or preventing the damage caused by excessive water levels, including dams, levees, and drainage systems.

Expected Loss

The anticipated amount of loss a party incurs due to risk, calculated as the sum of all possible losses each multiplied by the probability of that loss occurring.

Coastal Town

A town located near or on the coastline, often characterized by maritime activities and tourism.