Which of the Following Statements Is FALSE

question 17

Multiple Choice

Which of the following statements is FALSE?

• A)Even after adjusting for personal taxes,the value of an unlevered firm exceeds the value of a levered firm,and there is a tax advantage to using debt financing.
• B)In Modigliani and Miller's setting of perfect capital markets,firms could use any combination of debt and equity to finance their investments without changing the value of the firm.
• C)When firms raise new capital from investors,they do so primarily by issuing debt.
• D)In most years aggregate equity issues are negative,meaning that firms are reducing the amount of equity outstanding by buying shares.

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Definitions:

Sensitivity

The quality or condition of being easily affected, influenced, or harmed by external forces or stimuli.

Persuasive Message

Communication designed to convince or influence the audience to adopt a particular viewpoint or action.

Secondary Purpose

An additional aim or goal that supports or complements the primary objective of an action or plan.

Future Communication

Refers to evolving methods and technologies for exchanging information, considering advancements in digital and interactive platforms.