Which of the Following Statements Is FALSE

question 100

Multiple Choice

Which of the following statements is FALSE?

• A)A project that can be financed with internal funds will be less costly than the same project if it were financed with external funds.
• B)Issuance costs should be treated as cash outflows in NPV analysis.
• C)Issuance costs increase the WACC.
• D)External equity is less expensive than retained earnings.

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Definitions:

Net Income

The total earnings of a company after subtracting all expenses, taxes, and costs from its total revenue; also known as net profit.

Net Sales

The net amount acquired from sales after subtracting returns, allowances, and discounts.

Held-to-Maturity Securities

Financial instruments in the form of debt that a corporation plans to retain until their maturity date.

Short-Term Investments

Financial assets that are expected to be converted into cash or sold within a year, such as stocks or bonds.