10) Which of the following statements regarding a firms capital structure and leverage is incorrect?

A. A firm can reduce (lower) its leverage by retiring its existing debt or buying back its outstanding stock.

B. A firms capital structure basically refers to how the firms total capital is financed between (long-term) debt and equity.

C. The optimal leverage is that particular mix of debt and equity at which the firm value would be maximized.

D. The Irrelevance Theory by Modigliani and Miller (M&M) says that without taxes a firms capital structure does not matter to the maximization of the firm value or the minimization of its overall cost of capital..