Which of the following statements pertaining to capital structure is incorrect? According to the static trade-off theory, the optimal amount of debt allows a firm to maximize its value while also minimizing its WACC Debt signaling theory predicts that when managers raise the debt-to-equity ratio above the optimal level, the initial rise in stock price will eventually be followed by a decline of greater magnitude Based on the pecking-order theory, a firm should issue debt to finance a project before relying on internal equity Unlike the static trade-off theory, the pecking-order theory argues that firms can benefit from having additional cash on hand The pie model argues that capital structure does not affect the total value of the firm (VT)