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:

Household Products

Items and substances used within households for purposes such as cleaning, personal care, and maintenance.

Advertising

The act of promoting products, services, or ideas through various media channels to influence consumer behavior.

General Formula

A broad, universally applicable equation or statement that summarizes a fundamental principle or set of relationships.

Brand Management

The process of developing and maintaining a brand's image, reputation, and identity in the market.