Which of the Following Statements Is FALSE

question 5

Multiple Choice

Which of the following statements is FALSE?

• A) When a firm borrows significant money to repurchase shares or pay a large cash dividend, the transaction is called a leveraged recapitalization.
• B) MM Proposition I applies to capital structure decisions made at any time during the life of a firm.
• C) By choosing positive-NPV projects that are worth more than their initial investment, a firm can enhance its value.
• D) The choice of capital structure does not change the value of a firm if the cost of equity is higher than the cost of debt.

---

Definitions:

Negligent

Being negligent means failing to take proper care in doing something, resulting in damage or harm to others.

Unaudited

Pertaining to financial statements or accounts that have not undergone a formal examination and verification by an accountant.

Errors And Omissions Policy

A type of professional liability insurance that protects companies and individuals against claims made by clients for inadequate work or negligent actions.

Professional Malpractice Policy

Insurance coverage designed to protect professionals against liability claims resulting from errors, omissions, or negligence in their professional service.