A firm has an unlevered cost of equity of rho $=11\mathrm{.}25\%.$ The cost of debt is $5\%.$ The tax rate is T $=20\%.$ EBIT $=5,625,000($constant and perpetual$).$ There are $1$M shares outstanding.

I The value of the unlevered firm is $$40,000,000$

II If the firm issues $$20,000,000$ in debt, its capital structure is $50\%$ equity and $50\%$ debt

III Net Income for the levered firm is $$3,700,000$

a$.$ I and II b$.$ I and III c$.$ II and III d$.$ I, II$,$ and III