Question: True or false If false make the statement right The cost of capital is also known as the hurdle rate. The after-tax cost of debt

True or false

If false make the statement right

  1. The cost of capital is also known as the "hurdle rate".
  2. The after-tax cost of debt is higher than the before-tax cost of debt.
  3. The constant dividend growth model and CAPM are two ways of estimating a firm's cost of equity.
  4. The cost of capital uses the amounts of total assets and debt as the capital structure weights.
  5. In deriving the WACC, market values are preferred over book values for the capital structure weights.
  6. Ceteris paribus, with lower than average risk should be evaluated using a higher than average WACC.
  7. Ceteris paribus, a lower tax rate would result in a higher WACC.
  8. An unlevered firm is an all-equity firm.
  9. When estimating the cost of debt financing from bonds, a firm can use the yieldminustominusmaturity as the beforeminustax cost of debt.

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