Which of the following statement is INCORRECT regarding financial leverage ?
Financial leverage can dramatically alter the payoffs to the shareholders.
Financial leverage refers to the extent to which a firm relies on the debt.
Financial leverage must affect the overall cost of capital in any condition.
Financial leverage may not affect the overall cost of capital.

Hint #1: Read https://www.askmehelpdesk.com/finance-accounting/announcement-font-color-ff0000-u-b-read-first-expectations-homework-help-board-b-u-font.html

Hint #2: Suppose a situation involving a levered firm, in which the debt and the equity have the same after-tax capital cost. What happens to the WACC if the leverage is increased (assuming the specific component costs of the debt and equity remain unchanged)?