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MM Proposition I, with tax, supports the theory that A. the value of an unlevered firm is equal to the value of a levered firm

MM Proposition I, with tax, supports the theory that

A. the value of an unlevered firm is equal to the value of a levered firm plus the interest tax shield.

B. the value of a firm is inversely related to the amount of leverage used by the firm.

C. there is a positive linear relationship between the debt-to-equity ratio and firm value.

D. a firm's cost of capital is the same regardless of the mix of debt and equity used by the firm.

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