TERMS (Capital structure theory) Malch each of the following definitions to the appropriate terms. DEFINITIONS Independence theory-with corporate taxes The cost of capital is unaffected by the firm's choice of debt and equity financing Independence theory no taxes The cost of capital decreases as the firm initially uses debt to substitute for equity financing but eventually begins to increase as extreme levels of debt are used Saucer-shaped cost-of-capital curve The cost of capital decreases continuously as the firm increases its reliance on debt financing states that the cost of capital is unaffected by the firm's choice of debt and equity financing (Select from the drop down menu) states that the cost of capital decreases as the firm Initially uses debt to substitute for equity financing but eventually begins to increase as extreme levels of debt are used. from the drop-down menu) states that the cost of capital decreases continuously as the film increases its reliance on debt financing (Select from the drop down menu)