Indicate whether the following statements are true or false. Please explain why they are true or false.

A. Under the conditions of perfect capital markets, the cost of capital of a company financed fully by equity is expected to be equal to that of the same company but financed with 50% equity and 50% debt. (Explain)

B. The higher the systematic risk of a companys stock, the higher the value of its beta. The higher the beta, the higher the return required by the investors. (Explain)