Which of the Following Statements Is FALSE

question 6

Multiple Choice

Which of the following statements is FALSE?

• A)The APV approach explicitly values the market imperfections and therefore allows managers to measure their contribution to value.
• B)We need to know the debt level to compute the APV,but with a constant debt-equity ratio we need to know the project's value to compute the debt level.
• C)The WACC method is more complicated than the APV method because we must compute two separate valuations: the unlevered project and the interest tax shield.
• D)Implementing the APV approach with a constant debt-equity ratio requires solving for the project's debt and value simultaneously.

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