Which of the Following Statements Is FALSE

question 93

Multiple Choice

Which of the following statements is FALSE?

• A) Since the publication of their original paper, Modigliani and Miller's ideas have greatly influenced finance research and practice.
• B) Proposition I was one of the first arguments to show that the Law of One Price could have strong implications for security prices and firm values in a competitive market; it marks the beginning of the modern theory of corporate finance.
• C) The conservation of value principle extends far beyond questions of debt versus equity or even capital structure.
• D) The conservation of value principle for financial markets states that with perfect capital markets, financial transactions neither add nor destroy value, but instead represent a repackaging of risk (and therefore return).

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