The Interest Tax Shield Has No Value When a Firm

Multiple Choice

The interest tax shield has no value when a firm has:
I.no taxable income.
II.debt-equity ratio of 1.
III.zero debt.
IV.no leverage.

A) I and III only
B) II and IV only
C) I, III, and IV only
D) II, III, and IV only
E) I, II, and IV only
F) None of the above.