Which of the Following Statements Is False

Multiple Choice

Which of the following statements is false?

A) With zero taxes and zero bankruptcy costs, the value of the firm is independent of its debt-equity ratio.
B) With taxes and zero bankruptcy costs, the value of the firm reaches a maximum and then declines as the debt-equity ratio increases.
C) With taxes and bankruptcy costs, the value of the firm reaches a maximum and then declines as the debt-equity ratio increases.
D) With taxes and bankruptcy costs, the value of the firm is independent of its debt-equity ratio.