1. False - This statement is a duplicate of statement 2.
2. True - In the US, interest expense is tax-deductible for companies, while dividend payments are not.
3. True - Capital markets can be volatile, leading to securities trading at prices that may not reflect their intrinsic value.
4. True - Too much debt can lead to distress costs, such as transaction costs in financial restructuring or bankruptcy.
5. True - Extreme capital structures can indeed impact a company's operating strategy, potentially leading to different operating cash flows under various scenarios.