7. Which of the following statements is FALSE? O a. Because the firm's earnings per share and price-earnings ratio are affected by leverage implies that we can always reliably compare these measures across firms with different capital structures. b. The money taken in by the firm as a result of the share issue exactly offsets the dilution of the shares O c. Most analysts prefer to use performance measures and valuation multiples that are based on the firm's earnings before interest has been deducted. Od. In general, as long as the firm sells the new shares of equity at a fair price, there will be no gain or loss to shareholders associated with the equity issue itself 14 Which of the following statements is FALSE? a. Every nvestor should invest in the tangent portfolio Independent of his or her taste for risk. O b. If we increase the fraction invested in the efficient portfolio beyond 100% we are short selling the risk-free investment O c. As we increase the fraction invested in the efficient portfolio, we increase our risk premium but not our risk proportionately d. To earn the highest possible expected return for any level of volatility we must find the portfolio that generates the steepest possible line when combined with the risk-free investment