According to Modigliani and Miller Proposition I $($without taxes$),$ the value of a firm is: A$)$ Higher if it uses more debt. B$)$ Higher if it uses more equity. C$)$ The same regardless of its capital structure. Under Modigliani and Miller Proposition II $($without taxes$),$ the cost of equity: A$)$ Decreases as the firm increases its debt ratio. B$)$ Increases as the firm increases its debt ratio. C$)$ Remains constant regardless of the debt ratio. D$)$ Becomes irrelevant to the firm's value.According to M&M Proposition I with taxes, the value of a leveraged firm is: A$)$ The same as the value of an unleveraged firm. B$)$ Equal to the value of an unleveraged firm plus the present value of the tax shield on debt. C$)$ Less than the value of an unleveraged firm. D$)$ Determined solely by the cost of equity.n Modigliani and Miller Proposition II with taxes, the cost of equity: A$)$ Decreases as the firm increases its debt ratio. B$)$ Remains unchanged regardless of leverage. C$)$ Increases as the firm increases its debt ratio, but at a decreasing rate. D$)$ Increases as the firm increases its debt ratio due to the increased risk to equity holders.What is the impact of corporate taxes on the value of a firm's debt according to Modigliani and Miller Proposition I with taxes? A$)$ Debt becomes less valuable due to increased bankruptcy costs. B$)$ Debt value is unaffected by corporate taxes. C$)$ Debt value is enhanced by the tax shield provided by interest expense. D$)$ Debt value is decreased as it becomes riskier.