Answer the two questions which from a finance course followi

Answer the two questions which from a finance course following:11.6 Debt and the Weighted-Average Cost of Capital. Why do investorstypically accept a lower risk-adjusted rate of return on debt capital than equity capital? Supposea stable, financially healthy, profitable, tax-paying firm that has been financed with all equitynow decides to add a reasonable amount of debt to its capital structure. What effect will thechange in capital structure likely have on the firm’s weighted-average cost of capital?12.6 Valuation When Free Cash Flows Are Negative. Suppose you arevaluing a healthy, growing, profitable firm and you project that the firm will generate negative free cash flows for equity shareholders in each of the next five years. Can you use a free-cash-flows-based valuation approach when cash flows are negative? If so, explain how a free-cash-flowsapproach can produce positive valuations of firms when they are expected to generate negativefree cash flows over the next five years. Answer the two questions separately. Do not write in any essay format. Just one or two or more paragraphs for each questions. Prefer not using any references.