Question: Are the following statements true or false? 17. T/F: Operating leverage can have the effect of magnifying the percentage change in earnings before interest and

Are the following statements true or false?

17. T/F: Operating leverage can have the effect of magnifying the percentage change in earnings before interest and tax given a percentage change in net sales

19. T/F: A firms capital structure is comprised only of long-term debt, and equity financing.

20. T/F: Retained earnings has a cost of capital that is higher than that of the cost of capital for new issues of common stock because it includes a required return for the lack of dividend payments.

21. T/F: The cost of capital must be less than the return on a firms assets in order to increase the value of the firm.

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