MM Proposition II Is the Proposition That

Multiple Choice

MM Proposition II is the proposition that:

A) supports the argument that the capital structure of a firm is irrelevant to the value of the firm.
B) the cost of levered equity depends solely on the return on debt,the debt-equity ratio,and the tax rate.
C) a firm's cost of equity capital is a positive linear function of the firm's capital structure.
D) the cost of equity is equivalent to the required return on the total assets of a levered firm.
E) the cost of debt is inversely related to a firm's debt-equity ratio.