Which of the Following Statements Is FALSE

question 27

Multiple Choice

Which of the following statements is FALSE?

• A) As long as a firm's choice of securities does not change the cash flows generated by its assets, the capital structure decision will not change the total value of the firm or the amount of capital it can raise.
• B) If securities are fairly priced, then buying or selling securities has a net present value (NPV) of zero and, therefore, should not change the value of a firm.
• C) The future repayments that the firm must make on its debt are equal in value to the amount of the loan it receives up front.
• D) An investor who would like more leverage than the firm has chosen can lend and add leverage to his or her own portfolio.

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Definitions:

Monitoring

The process of observing and tracking certain activities, behaviors, or information to gather insights or maintain control.

KPI

Key Performance Indicator, a measurable value that demonstrates how effectively a company is achieving key business objectives.

Expensive

Involving a high cost or requiring a significant outlay of money.

Metrics

Quantitative measures used to assess, compare, and track performance or progress, often used within the context of business, marketing, and social media.