ROE=(1-DPO) X ROAX EM ROE=(1 (1-TRO ROA+(ROA-K A-kd] Then he made the following two statements: Statement 1: Given the first formula, the sustainable growth rate is attained reducing DPO regardless of the economic value added of the firm. Statement 2: The second formula shows that increasing the debt ratio will increase the ROE across the entire range of the debt ratio. Statement 1: Correct Statement 2: Correct Statement 1: Incorrect Statement 2: Correct Statement 1: Incorrect Statement 2: Incorrect