Question: Q2. State true or false, and briefly explain your answer. A. A companys cost of debt is the contracted rate it pays on its outstanding

Q2. State true or false, and briefly explain your answer.

A. A companys cost of debt is the contracted rate it pays on its outstanding debt.

B. Free Cash Flow to Equity can be less than net income.

C. An increase in stock price leads to lower implied cost of equity.

D. The dividend discount model will generally undervalue stocks relative to free cash flow to equity model.

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