Question: 10. Which Statement is False? a. adding debt will increase the firms ROE as long as the cost of debt is less than their basic

10. Which Statement is False?

a. adding debt will increase the firms ROE as long as the cost of debt is less than their basic earning power

b. the level of debt does not affect the business rsikof a firm

c. if a company increases its level of debt, then its net incrome will increase

d.According to the tradeoff model of capital structure, the costs of debt and equity will both rise as the level of debt increases.

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