Shareholders of a leveraged firm

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In a frictionless world, the shareholders of a leveraged firm can increase their value by swapping debt for equity.(True Or False) and Why?

If a company keeps more cash, all else remaining equal, the risk to shareholders comes down.(True Or False) and Why?

If a company converts some of its debt into equity, its shareholders face lower risk after the conversion.(True Or False) and Why?

If the asset value of a firm goes up, shareholders of a leveraged firm benefit more than a similar firm with no debt.(True Or False) and Why?

Adding more debt to a company makes its assets riskier.(True Or False) and Why?

Adding more debt to a company can increase the risk to shareholders.(True Or False) and Why?

Reference no: EM133275175

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