1(a). (TRUE or FALSE?) If market interest rates rise then boththe cost of equity and debt will decre

1(a). (TRUE or FALSE?) If market interest rates rise then boththe cost of equity and debt will decrease. 1(b). (TRUE or FALSE?) On average the firm must earn at leastits WACC (= ka) on projects of average risk in order to justmaintain the value of the firm at a constant level. 1(c). (TRUE or FALSE?) The cost of debt is always less than thecost of equity for a given firm. . . .

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