According to MM Proposition II:

Multiple Choice

• the cost of levered equity depends solely on the return on debt, the debt-equity ratio, and the tax rate.

• a firms cost of equity is a positive linear function of the firm's capital structure.

• the capital structure of a firm is irrelevant to the value of the firm.

• the cost of debt is inversely related to a firms debt-equity ratio.

• the cost of equity is equivalent to the required return on the total assets of a levered firm.