Which of the following statements is FALSE?
A)The relative proportions of debt,equity,and other securities that a firm has outstanding constitute its capital structure.
B)The most common choices are financing through equity alone and financing through a combination of debt and equity.
C)The project's net present value (NPV)represents the value to the new investors of the firm created by the project.
D)When corporations raise funds from outside investors,they must choose which type of security to issue.

Question

Quizplus · Accepted Answer

The project's net present value (NPV) represents the value of the project itself, not the value to new investors of the firm created by the project. The NPV measures the present value of cash flows generated by the project minus the cost of the project.

Which of the Following Statements Is FALSE