Question $2(20$ marks$)$

a$)$What is the Modiglian$-$Miller "Irrelevance Theorem of capital structure? $(5$ marks$)$

b$)$Differentiate between MM proposition I and MM proposition II $($Use diagrams where necessary$)(6$ marks$).$

c$)$i$)$ What is the implication of MM proposition I and II for working average cost of capital $($WACC$).(2$ marks$).$

ii$)$ Starting from the WACC in the case of MM proposition, derive the WACC for MM proposition II$.(7$ marks$).$