any one help me solve those questions?Thanks a lot?
Which of the following statements is FALSE? a. Modigliani and Miller's conclusion verified the common view, which stated that even with perfect capital markets, leverage would affect a firm's value. b. We can evaluate the relationship between risk and return more formally by computing the sensitivity of each security's return to the systematic risk of the economy. c. Increasing the leverage of the firm causes investors in the firm's equity to require a higher expected return. d. Leverage increases the risk of equity even when there is no risk that the firm will default. e. For a company that has some positive probability of bankruptcy, the yield to maturity of risky debt is higher than the debt's expected return. 11. Which of the following is NOT one of Modigliani and Miller's set of conditions referred to as perfect capital markets? a. All investors hold the efficient portfolio of assets. b. There are no taxes, transaction costs, or issuance costs associated with security trading. c. A firm's financing decisions do not change the cash flows generated by its investments, nor do they reveal new information about them. d. Investors and firms can trade the same set of securities at competitive market prices equal to the present value of their future cash flows. e. There are no bankruptey costs. 12. Which of the following statements is FALSE regarding higher leverage in a firm's capital structure? a. Higher leverage may reduce the value of the firm because it may induce management to switch to higher risk assets when the firm is near financial distress. b. Higher leverage may increase the value of the firm because it may use up free cash flows that management would otherwise waste on corporate perquisite. c. Higher leverage may increase the value of the firm because the pressure to make debt payments may reduce management shirking their responsibilities. d. Higher leverage will add less value to the firm if the government simultaneously increases the personal tax rate on debt income and reduces the personal tax rate on equity income. r. Higher leverage will increase the weighted average cost of capital for a firm because the firm becomes more risky. 13. Which of the following statements is TRUE? a. Personal taxes have the potential to offset some of the corporate tax benefits of leverage. b. The actual interest tax shield depends on the reduction in the total taxes (both corporate and personal) that are paid c. The amount of money an investor will pay for a security ultimately depends on the benefits the investor will receive-namely, the cash flows the investor will receive after all taxes have been paid. d. Just like corporate taxes, personal taxes reduce the cash flows to investors and diminish firm value. c. All of the above are true
