According to MM and their propositions regarding debt:

a. All else equal, in the absence of corporate tax, the firm’s capital structure is “irrelevant”.

b. All else equal, the present value of the tax savings due to the corporate tax deductibility of interest rates on the firm’s debt is an argument in favour of debt.

c. Statement a but not Statement b is essentially a correct interpretation of the MM propositions.

d. Both Statements a and b are essentially a correct interpretation of the MM propositions.