Which of the Following Statements Is FALSE

question 75

Multiple Choice

Which of the following statements is FALSE?

• A)Holding cash has the opposite effect of leverage on risk and return.
• B)We use the market value of the firm's net debt when computing its WACC and unlevered beta to measure the cost of capital and market risk of the firm's business assets.
• C)Since the WACC does not change with the use of leverage,the value of the firm's free cash flow evaluated using the WACC does not change,and so the enterprise value of the firm does not depend on its financing choices.
• D)Even if the firm's capital structure is more complex,the WACC is calculated by computing the weighted average cost of only the firm's debt and equity.

---

Definitions:

Deinstitutionalization

The discharge, begun during the 1960s, of large numbers of patients from long-term institutional care so that they might be treated in community programs.

Normalization Program

A process or initiative aiming to make certain practices, behaviors, or conditions accepted as normal within a society or group.

Legal And Human Rights

The body of law and principles that recognizes and protects the dignity, freedom, and inherent rights of all human beings.

Clinical Focus

Concentration on the assessment, diagnosis, treatment, and prevention of psychological disorders.