1. The cost of capital should reflect the weighted average cost of the various sources of long-term funds a firm uses to support its assets
2. All else equal, an increase in a company's stock price will increase the marginal cost of common stock, r_s.
3. Typically the after-tax cost of debt financing exceeds the after-tax cost of equity financing.
4. The WACC represents the cost of capital based on historical averages. In that sense, it does not represent the marginal cost of capital.
5. When calculating the cost of capital, the cost of retained earnings should be zero as the company already earned it in previous periods.
6. If a stock's dividend is expected to grow at a constant rate of 5 percent a year, the expected return on the stock is 5 percent a year.
7. The stock valuation model, P₀= D₁/(r_sg), can not be used for firms that have negative growth rates.
8. The price of a stock is the present value of all expected future dividends, discounted at the stock's required rate of return.
9. If markets are semi-strong efficient, investors should not expect to earn returns above those predicted by the SMLbecause all public information is already reflected in prices.

1 thru 9 is true or false