5. True or False? Explain. For each statement, determine if it is true or false and then provide an explanation.

a. A firm can incur costs of financial distress even if it never files for bankruptcy. True or False? Explain.

b. Diversifiable risk is the only risk investors are rewarded for bearing. True or False? Explain.

c. The optimal capital structure represents the mix of debt and equity that maximizes the cost of capital and also maximizes firm value. True or False? Explain.