Answer the following in 100 words(each).

1. Because debt interest lowers a companys tax bill, companies should always try to borrow as much as possible. Say whether you agree or disagree and explain why.
2. The cost of debt for a company is always lower than the cost of equity. For this reason, a company should always finance new projects with debt. Say whether you agree or disagree and explain why.
3. Explain why standard methods of calculating the NPV of a project do not capture the value of real options.
4. Companies whose assets have low betas have low costs of capital and this gives them a competitive advantage in takeover battles since they will place a higher value on the assets of takeover targets than companies with high beta assets. Say whether you agree or disagree and explain why.
5. A companys lenders and its shareholders can sometimes disagree about the investments that the company should make. Keeping leveraging low helps to keep these disagreements to a minimum. Say whether you agree or disagree and explain why.