Answered: Which of the following statements is…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter25: Portfolio Theory And Asset Pricing Models

Section: Chapter Questions

Problem 8MC: You have been hired at the investment firm of Bowers & Noon. One of its clients doesn’t understand...

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Which of the following statements is false?

Group of answer choices

a.If management does not consider the needs of the bondholders of a firm, they could end up destroying shareholder value

b.If management chooses to ignore the needs of bondholders when structuring a firm, the firm can be expected to have to pay a higher interest rate on its debt

c.In a perfect capital market, if a firmʹs current capital structure is not optimal, one can expect that firm to be a takeover target

d.Management should focus only on the needs of a firmʹs shareholders since they are the true owners of the firm and, as such, they elect the firmʹs directors

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