1. Which of the following are true according to the Modigliani and Miller propositions?

1. In a world without taxes, all else equal, the value of a firm with a low debt-to-equity ratio is higher than the value of a firm with a high debt-to-equity ratio.
2. In a world without taxes, a firm's cost of equity capital increases as the firm takes on more debt.
3. In a world with taxes, firm value is maximized when the firm has a low debt-to-equity ratio.
4. In a world with taxes, a firm's cost of equity capital increases as the firm takes on more debt.

1. ii, iii, and iv, but not i
2. i, iii, and iv, but not ii
3. ii and iv, but not i or iii
4. i, ii, and iii, but not iv