Which of the following is False? a) In a Modigliani Miller world without taxation, assuming that your company has positive net debt (i

Which of the following is False?

a) In a Modigliani Miller world without taxation, assuming that your company has positive net debt (i.e. debt minus cash) and its assets bear some systematic risk, the beta of debt will be always smaller than or equal to the beta of unlevered equity.

b) The expected return of risky debt, in general, has a yield to maturity larger than its expected return.

c) According to the pecking order theory, if a company issues new equity to finance a project, it has a good chance to experience a stock price drop.

d) None of the above.