Under MM-Proposition I with no taxes, an increase in the proportion of debt in the capital structure results in:

A.

No impact on future cash flows and no impact on the cost of capital.

B.

A decrease in future cash flows and a decrease in the cost of capital.

C.

An increase in future cash flows and a decrease in the cost of capital.

D.

An increase in future cash flows and an increase in the cost of capital.

E.

A decrease in future cash flows and an increase in the cost of capital.