Which of the following statements is FALSE?
A)As a general rule,the WACC method is the easiest to use when the firm will maintain a fixed debt-to-value ratio over the life of the investment.
B)The FTE method is typically used only in complicated settings for which the values of other securities in the firm's capital structure or the interest tax shield are themselves difficult to determine.
C)For alternative leverage policies,the FTE method is usually the most straightforward approach.
D)When used consistently,the WACC,APV,and FTE methods produce the same valuation for the investment.

Question

Quizplus · Accepted Answer

The FTE (Flow to Equity) method is not necessarily the most straightforward approach for alternative leverage policies. It is often more complex compared to the WACC (Weighted Average Cost of Capital) and APV (Adjusted Present Value) methods.

Which of the Following Statements Is FALSE