MM Proposition I with taxes supports the theory that:

1-there is a positive linear relationship between the amount of debt in a levered firm and its value.

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

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

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

5-a firm's weighted average cost of capital increases as the debt-equity ratio of the firm rises.