true or false

4. MM Proposition I with corporate taxes states that by raising the debt to equity ratio, the firm can lower its taxes and thereby increase its total value. 49 5. The variance of Stock A is .004, the variance of the market is 007 and the covariance between the two is .0026. The correlation coefficient is 0.4913. . 4 6. The Modigliani-Miller Proposition I without taxes states a firm cannot change the total value of its outstanding securities by changing its capital structure proportions. E 7. An advantage of the APT over CAPM is APT can handle multiple factors. TEO 8. There are no differences in the capital structure of different industries. DEWO 9. According to the CAPM, the expected return on a security is positively and linearly related to the security's beta