MM Proposition II is the proposition that:

a$.$ supports the argument that the capital structure of a firm is irrelevant to the value

of the firm.

b$.$ a firm's cost of equity capital is a positive linear function of the firm's capital

structure.

C$.$ supports the argument that the size of the pie does not depend on how the pie is

sliced.

d$.$ the cost of levered equity depends solely on the return on debt, the debt$-$equity

ratio, and the tax rate.