Question 22 of 28 MM Proposition I says the total value of a firm is independent of its choice of capital structure. MM Proposition II says the cost of capital of levered equity increases when leverage increases." Which of the following statements is true? A. MM Proposition I assumes that firms may go into bankruptcy. MM Proposition II assumes that firms will not go into bankruptcy B. Both propositions assume that firms will not go into bankruptcy. C. MM Proposition I assumes that firms will not go into bankruptcy. MM Proposition Il assumes that firms may go into bankruptcy. D. Both propositions assume that firms may go into bankruptcy. Reset Selection