Select all the true statements

Question 1 options:

	If a firm relies very heavily on debt financing, an increase in taxes would lower the WACC
	If general level of interest rates increase, then the WACC increases
	If a firm begins to select more risky projects, eventually the WACC will increase
	A firm should choose the target capital weights so that the WACC is as high as possible

Select all the correct statements.

Question 2 options:

	For the purpose of computing the cost of capital, retained earnings always have a cost of 0% because they are money the firm already has.
	The goal of financial management is to maximize the WACC
	Typically, issuing new stock is the most expensive form of raising capital
	For the purpose of calculating cost of capital, we use the after-tax cost of debt