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

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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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