Answer the following question:

Part A:

Which of the following statements is true?

I. Everything else being equal, an increase in the discount rate will result in an increased firm value

II. Everything else being equal, an increase in the RIOC will result in an increased firm value

III. Everything else being equal, a decrease in the NOPAT and an increase in the RIOC will result in a decreased firm value

IV. Everything else being equal, an increase in future FCFs will result in a decreased firm value

Part B:

In a cash merger, the number of shares outstanding of the combined firm is lower than the number of shares outstanding of the acquiring firm before the merger.

a) True

b) False