Which of the Following Statements Is FALSE

question 95

Multiple Choice

Which of the following statements is FALSE?

• A)Even though firms have not issued new equity,the market value of equity has risen over time as firms have grown.
• B)While firms seem to prefer debt when raising external funds,not all investment is externally funded.
• C)To receive the full tax benefits of leverage a firm needs to use 100% debt financing.
• D)If bankruptcy is costly,these costs might offset the tax advantages of debt financing.

Differentiate between shifts in demand and supply versus movements along the demand and supply curves.

Analyze the effects of complementary and substitute goods on market dynamics.

Recognize the role of consumer expectations and preferences in shaping market demand.

Discern the distinction between normal goods and inferior goods in relation to income changes.

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Definitions:

Reality Testing

Reality testing is a psychological process that measures an individual's ability to distinguish between the external world and their internal thoughts and perceptions.

Extreme Distortions

Severely inaccurate or exaggerated beliefs or perceptions, often disconnected from reality.

Delusions

Firmly held erroneous beliefs that are not grounded in reality, often stemming from psychological disorders.

Relevant Environmental Factors

External conditions or influences that significantly impact an individual's behavior, decisions, or well-being.