Which of the Following Statements Is FALSE

Which of the following statements is FALSE?

A) In a perfect market without other frictions, insurance companies should compete until they are just earning a fair return and the NPV from selling insurance is zero. The NPV is zero if the price of insurance equals the present value of the expected payment; in that case, we say the price is 'actuarially fair'.
B) Because insurance reduces the risk of financial distress, it can relax this trade-off and allow the firm to increase its use of debt financing.
C) When a firm is subject to graduated income tax rates, insurance can produce a tax saving if the firm is in a higher tax bracket when it pays the premium than the tax bracket it is in when it receives the insurance payment in the event of a loss.
D) By lowering the volatility of the shares, insurance discourages concentrated ownership by an outside director or investor who will monitor the firm and its management.