True/False

1.Assume that ABC Corporation, a public company, has an enterprise value of $3.0 billion and an equity market value of $1.5 billion. If ABC Corporation issues $400 million of new debt and holds the proceeds in cash (on its balance sheet), this will cause the equity market value to decline.

2. In the Airline industry, U.S. anti-trust regulators are more likely to block a vertical merger than a horizontal merger.