Which of the Following Statements Is FALSE

question 7

Multiple Choice

Which of the following statements is FALSE?

• A)The data show a clear preference for equity as a source of external financing for the total population of U.S.firms.
• B)Debt as a fraction of firm value has varied in a range from 30-45% for the average firm.
• C)Capital expenditures greatly exceed firms' external financing,implying that most investment and growth is supported by internally generated funds,such as retained earnings.
• D)Firms in growth industries like biotechnology or high technology carry very little debt,whereas airlines,auto makers,utilities,and financial firms have high leverage ratios.

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Definitions:

Consumer Preference

The subjective tastes and preferences that influence buyers' choices of goods and services.

Equilibrium Quantity

The quantity of goods or services supplied is equal to the quantity demanded at the market price.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, leading to a balance in the market.

Consumer Preference

The inclination of consumers toward certain products or services over others based on their characteristics, such as taste, quality, and price.