Which of the following statements is false? A. When firms raise new capital from investors, they do
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Question:
Which of the following statements is false?
A. When firms raise new capital from investors, they do so primarily by issuing debt.
B. In Modigliani and Miller's setting of perfect capital markets, firms could use any combination of debt and equity to finance their investments without changing the value of the firm.
C. Even after adjusting for personal taxes, the value of an unlevered firm exceeds the value of a levered firm, and there is a tax advantage to using debt financing.
D. In most years aggregate equity issues are negative, meaning that firms arc reducing the amount of equity outstanding by buying shares.
Related Book For
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
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