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Which of the Following Statements Is FALSE

Question 88

Multiple Choice

Which of the following statements is FALSE?


A) Even though firms have not issued new equity,the market value of equity has risen over time as firms have grown.
B) While firms seem to prefer debt when raising external funds,not all investment is externally funded.
C) To receive the full tax benefits of leverage a firm needs to use 100% debt financing.
D) If bankruptcy is costly,these costs might offset the tax advantages of debt financing.

Correct Answer:

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