Which of the following statement about capital structure is INCORRECT? With financial distress, managers have higher incentives to take riskier projects and to underinvest. Capital structure should be established to enable and support a firm's strategy. Use of debt increases firm value due to the tax shield of debt and amplifies the risk of bankruptcy at the same time. WACC in practice is NOT strictly decreasing in the amount of debt. The cost of equity in practice is NOT strictly increasing in the amount of debt