M&M Proposition II supports the theory that:

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

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

c.) the value of an unlettered firm is equal to the value of a levered firm plus the value of the interest tax shield

d.) a firm's cost of equity increases as the debt-equity ratio of the firm decreases.