Which of the Following Statements Correctly Relate to M&M Proposition

Multiple Choice

Which of the following statements correctly relate to M&M Proposition I,with taxes?
I.Debt decreases the value of a firm.
II.The levered value of a firm exceeds the firm's unlevered value.
III.The weighted average cost of capital (WACC) is constant.
IV.The optimal capital structure is zero debt.

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