You have just returned to your job after completing your MBA, generously funded by the CEO. A few days later, your CEO requests you to evaluate the following news release he will issue to analysts. "For years we have thought about our business strategy, without worrying about financing. Times have changed and we need to think about our cost of capital. Since debt is always cheaper than equity, we have decided to use debt to finance our next major projects." What is your assessment of this statement?

False

True