1. The after-tax cost of debt is higher than the before-tax cost of debt. True or False

2. The constant dividend growth model and CAPM are two ways of estimating a firm's cost of equity. True or False

3. The cost of capital uses the amounts of total assets and debt as the capital structure weights. True or False

4. In deriving the WACC, market values are preferred over book values for the capital structure weights. True or False

5. Ceteris paribus, projects with lower than average risk should be evaluated using a higher than average WACC. True False

6. An unlevered firm is an all-equity firm. True or False

7. When estimating the cost of debt financing from bonds, a firm can use the yield. True or False