3. M&M theory with tax (but no bankruptcy cost) supports which of the following: I. a firm's WACC decreases as the firm's debt-equity ratio increases. II. The value of the firm increases by the PV of the annual interest tax shield. III. Cost of Equity decreases as the firm's debt-equity ratio increases. IV. Leverage reduces the cost of equity, but increases the overall cost of capital A. I only. B. I and II C. I, II, and III D. All of them