Which of the following statements regarding recapitalizations is FALSE?
A) With a recapitalization,even though leverage reduces the total value of equity,shareholders capture the benefits of the interest tax shield up front.
B) The share price always rises after the completion of the recapitalization.
C) Leveraged recaps were especially popular in the mid- to late-1980s,when many firms found that these transactions could reduce their tax payments.
D) When a firm makes a significant change to its capital structure,the transaction is called a recapitalization.
Correct Answer:
Verified
Q49: Use the information for the question(s)below.
Flagstaff Enterprises
Q50: Use the information for the question(s)below.
LCMS Industries
Q51: Use the information for the question(s)below.
Flagstaff Enterprises
Q52: Galt Industries has 125 million shares outstanding
Q53: Use the information for the question(s)below.
Flagstaff Enterprises
Q55: Which of the following statements is FALSE?
A)Once
Q56: Use the information for the question(s)below.
LCMS Industries
Q57: Use the information for the question(s)below.
KD Industries
Q58: Use the information for the question(s)below.
Flagstaff Enterprises
Q59: Use the information for the question(s)below.
KD Industries
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