True or false
1. Suppose asset A and asset B are uncorrelated and both have a Sharpe ratio of .4. Then a portfolio consisting of equal investment in asset A and asset B will also have a Sharpe ratio of .4.
2. Glover Inc. has a WACC of .07 and a tax rate of .30. If it issues a preferred stock with a par value of $50 and an annual dividend of $4, its WACC will increase.
3. Glover Inc. has a WACC of .07 and a tax rate of .30. If it issues a zero coupon bond with a par value of $1000, a maturity of 10 years and a price of $500, its WACC will increase.
4. From 2000 to 2014, the amount of public debt raised by US firms is about 5 times the amount of public equity raised.