Assume a frictionless financial market. Do you agree with the following statements?

Select one of the following: Yes (Y), No (N), or Uncertain (U).

Part (A)

The cost of capital for a project is the rate of return on the firms cheapest source of funding.

Part (B)

A projects idiosyncratic risk matters in its valuation since the firm cannot diversify this risk.

Part (C)

A projects cost of capital is always lower for a firm with a diverse portfolio of assets

Part (D)

A projects cost of capital does not depend on which firm takes it.

Part (E)

A projects cost of capital in general increases with its risk.