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 RWacc.
B) increasing the debt-equity ratio increases firm value.
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