True or false with explanation

Question 2: True or False (2 marks) 1- An optimal capital structure is the best mix of equity and debt financing that maximizes a company's market value and its cost of capital ( ) 2- Capital budgeting, is the process of determining which real investment projects should be accepted and given an allocation of funds from the firm ( ) 3- Interest expense increases our tax liability ( ) 4- Credit risk is the risk that the value of an investment will decrease due to changes in market factors ( )