Which of the Following Statements Is FALSE

question 64

Multiple Choice

Which of the following statements is FALSE?

• A)The market value balance sheet captures the idea that value is created by a firm's choice of assets and investments.
• B)One application of MM Proposition I is the useful device known as the market value balance sheet of the firm.
• C)On the market value balance sheet the total value of all securities issued by the firm must equal the total value of the firm's assets.
• D)Investors can alter the leverage choice of the firm to suit their personal tastes either by borrowing and reducing leverage or by holding bonds and adding more leverage.

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Definitions:

Restrictive

Imposing limitations or conditions on something's scope, use, or extent.

Nonrestrictive

Describing a clause or phrase that provides additional information without limiting the meaning of the sentence.

Nonrestrictive Clause

A type of clause in a sentence that provides additional information but does not limit or restrict the meaning of the main clause.

Restrictive

A term describing clauses, rules, or adjectives that limit or define the entities they refer to more narrowly.