Question: Please discuss the following two sentences (whether true or false) and an explanation: 1. a decrease in share price will increase leverage, thus a firm

Please discuss the following two sentences (whether true or false) and an explanation:

1. a decrease in share price will increase leverage, thus a firm can raise additional equity to reduce leverage.

2. a higher leverage increases credit risk and thus a company can sell assets, reduce capital expenditure and deferred dividend payments to have more cash to pay to creditors.

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