Which of the Following Statements Is FALSE

question 9

Multiple Choice

Which of the following statements is FALSE?

• A)When we relax the assumption of a constant debt-equity ratio,the FTE method is relatively straightforward to use and is therefore the preferred method with alternative leverage policies.
• B)When debt levels are set according to a fixed schedule,we can discount the predetermined interest tax shields using the debt cost of capital,r_D.
• C)With a constant interest coverage policy,the value of the interest tax shield is proportional to the project's unlevered value.
• D)When the firm keeps its interest payments to a target fraction of its FCF,we say it has a constant interest coverage ratio.

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Definitions:

Criticism

The practice of analyzing, evaluating, or expressing disapproval of faults or shortcomings.

Philip's 66

A technique used in group meetings where participants are broken down into smaller groups of six to discuss an issue for six minutes.

Large Groups

Collections of individuals exceeding the size of small or typical groups, which may necessitate different organizational or communication approaches.

Small Groups

A collection of individuals, typically between 3 and 12, gathered for a common purpose or task.