Which of the following statements is FALSE?

Select one:

a. The action of selling stock to the public for the first time is called a seasoned equity offering (SEO).

b. Public companies commonly have access to much larger amounts of capital through the public markets.

c. By going public, companies give their private equity investors the chance to diversify.

d. Two advantages of going public are more liquidity and better access to capital.

It is incorrect to discount the cash flows of a levered firm with the stock return of the unlevered firm, because ________.

Select one:

a. debt increases the risk of equity of the firm

b. debt decreases the risk of equity of the firm

c. debt does not affect the risk of equity of the firm

d. debt changes the unlevered stock return