Which statement is False?

a. Adding debt will increase the firms ROE as long as the cost of debt is less than their Basic Earning Power.

b. Firms with high levels of debt will have more business risk.

c. If a company increases its level of debt, then its Net Income will decrease d. According to the tradeoff model of capital structure, the costs of debt and equity will both rise as the level of debt increases.

d, According to the tradeoff model of capital structure, the costs of debt and equity will both rise as the level of debt increases.