His ____________ claims about his company's success were quickly debunked when financial reports revealed massive losses.
Correct: B
The sentence indicates that the claims were false and exposed by financial reports showing losses. 'Mendacious' means not telling the truth; lying. This perfectly fits the context of false claims. 'Veracious' means speaking or representing the truth, which is the opposite. 'Laudable' means deserving praise and commendation. 'Innocuous' means not harmful or offensive.