MM Proposition I with Taxes States That

Multiple Choice

MM Proposition I with taxes states that:

A) capital structure does not affect firm value.
B) increasing the debt-equity ratio increases firm value.
C) firm value is maximized when the firm is all-equity financed.
D) the cost of equity rises as the debt-equity ratio increases.
E) the unlevered cost of equity is equal to R_Wacc.