QUESTION 23 Which of the following statements is FALSE? a. A firm that raises all of its capital via equity is referred to as an unlevered firm. b. WACC is the average of a firm's equity and debt cost of capital, weighted by their relative proportion. c. Afirm's cost of debt is the rate of interest it would have to pay to refinance its existing debt. d. In WACC calculation, we determine the weights based on the book values of debt and equity. QUESTION 24 Which of the following statements is correct? a) When calculating the WACC, it is a standard practice to subtract dividend and risk free securities to compute the net debt outstanding b) When corporate tax rates decline the effective cost of debt increases A project's cost of capital does not depend on its risk d) The pre-tax cost of debt equals to the debt's coupon rate