Generally, the variability in both ROE and EPS decrease when a firm increases its financial leverage. _______

		True.
		False.

If preferred stock pays a $5 annual dividend and sells for $20. The cost of preferred stock financing is _______ if we don't consider floatation costs.

		5%
		10%
		25%
		50%

A well-diversified portfolio can diversify the company-unique risk, but it cannot diversify the market risk ______

		True.
		False

The cost of debt must be adjusted for corporate taxes and this is accomplished by multiplying by (1 - T_c), where T_c is corporate tax rate. ______

		True.
		False.