Which of the Following Statements Is FALSE

question 87

Multiple Choice

Which of the following statements is FALSE?

• A)The agency costs of debt can arise only if there is no chance the firm will default and impose losses on its debt holders.
• B)Agency costs represent another cost of increasing the firm's leverage that will affect the firm's optimal capital structure choice.
• C)An under-investment problem occurs when shareholders choose to not invest in a positive-NPV project.
• D)When a firm faces financial distress,it may choose not to finance new,positive-NPV projects.

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Definitions:

Leadership Style

The approach or technique that a leader uses to guide, motivate, and manage members of a group or organization.

Adult Life

The phase of human life where an individual is considered legally and socially independent and responsible.

Stability

The fourth stage of retirement, when the retiree settles into a lifestyle that is satisfactory to her.

Change

The process or act of becoming different, which can occur in various contexts such as personal life, nature, or technology.