Which of the following statements is false?
A)With zero taxes and zero bankruptcy costs, the value of the firm is independent of its debt-equity ratio.
B)With taxes and zero bankruptcy costs, the value of the firm reaches a maximum and then declines as the debt-equity ratio increases.
C)With taxes and bankruptcy costs, the value of the firm reaches a maximum and then declines as the debt-equity ratio increases.
D)With taxes and bankruptcy costs, the value of the firm is independent of its debt-equity ratio.

Question

Quizplus · Accepted Answer

The Answer of Which of the following statements is false?
A)With zero taxes and zero bankruptcy costs, the value of the firm is independent of its debt-equity ratio.
B)With taxes and zero bankruptcy costs, the value of the firm reaches a maximum and then declines as the debt-equity ratio increases.
C)With taxes and bankruptcy costs, the value of the firm reaches a maximum and then declines as the debt-equity ratio increases.
D)With taxes and bankruptcy costs, the value of the firm is independent of its debt-equity ratio.

Which of the Following Statements Is False