Which of the Following Will Increase the Value of a Levered

Multiple Choice

Which of the following will increase the value of a levered firm according to M&M Proposition I, with taxes? I. decrease in the amount of the debt
II) increase in the value of the unlevered firm
III) decrease in the tax rate
IV) increase in the interest rate on the debt

A) II only
B) I and IV only
C) II and III only
D) II and IV only
E) II, III, and IV only