M & M Proposition I with Taxes Is Based on the Concept

Multiple Choice

M & M Proposition I with taxes is based on the concept that:

A) the optimal capital structure is the one that is totally financed with equity.
B) the capital structure of a firm does not matter because investors can use homemade leverage.
C) a firm's WACC is unaffected by a change in the firm's capital structure.
D) the value of a firm increases as the firm's debt increases because of the interest tax shield.
E) the cost of equity increases as the debt-equity ratio of a firm increases.