EquityKing says to EquityLoser free, available, decrease, increase

atate2007

EquityKing says to EquityLoser:
1. The free cash flow models would be appropriate because free cash flow is not impacted by the firm’s dividend payout policy but any stock issuance in the future can have a significant impact on cash flow available to common stockholders.
2. I would further caution that an increase in leverage will lead to a decrease in FCFE in the year debt is issued, thereby potentially reducing the value per share.

A. Equity king is right about 1 but wrong about 2.
B: Equity king is right about 2 but wrong about 1.
C. Equity king is wrong about both.
D. Equity king is right about both.