State 'true' or 'false', and briefly explain your answer. 1. Valuation only makes sense if the markets are inefficient. 2. We should use long term risk free rates in valuations even if we have a short investment horizon. 3. We should use the official price of a stock to calculate the returns. 4. Other things being equal the beta of a stock with higher operating leverage will be higher. 5. In steady state, the revenue and earnings of a firm can grow at different rates. 6. Valuations using FCFE or Dividends will lead to identical results. 7. Residual income model is better than dividend discount model since it recognises value earlier than valuations based on dividends. 8. Since the timing and scale of acquisitions is difficult to forecast, we can assume the firm will not make any further acquisitions. 9. We should estimate the cost of debt by dividing interest charge in the income statement by the amount of debt in the balance sheet. 10. Firms with a higher Price/Earnings ratio are overvalued relative to those with a lower ratio. 11. The Price to Sales ratio should not be used for relative valuation. 12. Though the forecasted year-on-year project cash flows are highly correlated, the present value of these cash flows follows a random walk.