M&M Proposition II, Without Taxes, Is the Proposition That

Multiple Choice

M&M Proposition II, without taxes, is the proposition that:

A) the capital structure of a company has no effect on that company's value.
B) the cost of equity depends on the return on debt, the debt-equity ratio, and the tax rate.
C) a company's cost of equity is a linear function with a slope equal to (RA − RD) .
D) the cost of equity is equivalent to the required rate of return on assets.
E) the size of the pie does not depend on how the pie is sliced.