In a World Without Taxes, M&M Proposition I Contends That

Multiple Choice

In a world without taxes, M&M Proposition I contends that:

A) The cost of equity is dependent upon the debt-ratio of the firm.
B) A firm's cost of equity varies with its cost of debt.
C) The total value of the firm remains constant regardless of the debt-equity mixture applied.
D) A firm's WACC also determines its cost of equity.
E) The cost of capital is a linear function with a positive slope.