Q3-Why does M&M Proposition I not hold in the presence of corporate taxes? (5 pts.) 1. Levered firms pay lower taxes when compared with identical unlevered firms. 2. Earnings per share are no longer relevant with taxes. 3. Dividends are no longer relevant with taxes. 4. Bondholders require higher rates of return compared with stockholders. Q4- Assuming that bonds are sold at a fair price, the benefits from the interest tax shield go to the (5 pts.) 1. Managers of the firm. 2. Bondholders of the firm. 3. Stockholders of the firm. 4. Lawyers of the firm