Which of the Following Statements Is False

question 19

Multiple Choice

Which of the following statements is false?

• A) Different firms are subject to different levels of risk.
• B) Debt is often the least costly form of financing for a firm.
• C) Firms should probably use some debt in their capital structure.
• D) As debt increases, the risk associated with bankruptcy and agency costs is reduced.
• E) All of the above statements are true.

---

Definitions:

Remedy Limitation

A legal principle specifying the conditions or time frames within which a remedy, such as filing a lawsuit or making a claim, must be initiated.

Prima Facie Unconscionable

A legal term indicating that an agreement or term appears, at first sight, to be excessively unfair or unjust.

Common Law

A body of law developed through court decisions over time, as opposed to laws enacted by legislatures (statutory law).

Rescission

The act of cancelling a contract and returning all parties involved to their positions before the contract was made.