MM Proposition I Without Taxes Illustrates That

Multiple Choice

MM Proposition I without taxes illustrates that:

A) the value of an unlevered firm is less than that of a levered firm.
B) one capital structure is as good as any other capital structure.
C) corporate use of homemade leverage affects the value of the firm.
D) the debt-equity ratio affects the cost of equity capital.
E) the slope of the cost of equity function is equal to the rate of return on bonds.