The cost of capital for a firm, rWACC, in a tax-free environment is

I equal to the market value weighted average of the return on equity and the return on debt;

II equal to rA, the rate of return required on the unlevered firm;

III equal to the overall rate of return required on the levered firm

OPTIONS

I only

II only

III only

I and II only

I and III only

I, II and III