Which of the following statements is FALSE? When corporations raise funds from outside investors, they must choose which type of security to issue. Modigliani and Miller's theory stated that with perfect capital markets and no taxes, leverage would not affect a firm's value. The relative proportions of debt, equity, and other securities that a firm has outstanding constitute its distribution policy The most common choices are financing through equity alone and financing through a combination of debt and equity. A Firm can make the best capital budgeting decision by first computing the free cash flow associated with each alternative and then choosing the alternative with the highest net present value payback period discounted payback period Chow