A financial manager makes a choice of the amount and source of capital based on how the choice will impact

Which of the following statements is FALSE? O a While debt itself may be cheap, it increases the risk and therefore the cost of capital of the firm's equity b Although debt does not have a lower cost of capital than equity, we can consider this cost in isolation C. We can use MM Proposition l to derive an explicit relationship between leverage and the equity cost of capital O d The total market value of the firm's securities is equal to the market value of its assets, whether the firm is unlevered or levered