True and False

1. In the context of one-stage DCF valuation models, we must never forecast a growth rate greater than the cost of equity.
2. In the context of DCF, a company maintaining a capital structure policy of zero debt will have a levered equity beta smaller than its unlevered equity beta. (All all other inputs remain unchanged.)
3. In DCF valuation, a company can increase its return on equity (ROE) by increasing its leverage ratio (D/E) if and only if its return on capital (ROC) exceeds the after-tax cost of debt (r_d x (1-Tc)). (Assume all other inputs are fixed.)
4. Any company with growing earnings and dividends will be worth even more if the owners reinvest a larger fraction of the company's earnings.
5. In the context of DDM, a dividend payout ratio equal to 100% implies that the future growth rate of dividends per share (DPS) will be equal to 0%.