TRUE or FALSE - Provide Explanation

4. Companies might be tempted to use WACC if they find it difficult to estimate the required return for a new project, but they need to be cautious in doing so as WACC might not be an appropriate discount rate.

5. The business risk of a firm reflects the level of leverage that the firm has taken on. The greater the leverage, the more business risk there will be as reflected in higher variability in ROA.