Write 'T' if the statement is true and 'F' if the statement is false. 1. The cost of equity is generally much higher than the after-tax cost of debt. Therefore, increasing the debt ratio will always lower the cost of capital. true false 2. When calculating the WACC for a firm, one should use the market values of debt and equity. true false 3. According to MM's Proposition 1, Value of levered firm = Value of unlevered firm + PV interest true 0 false