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

I. In a world with no taxes, the value of a levered firm is greater than the value of an

otherwise equivalent unlevered firm.

II. In a world with no taxes, the cost of equity capital of a levered firm is greater

than the cost of equity capital of an otherwise equivalent unlevered firm.

III. In a world with taxes, the value of a levered firm is greater than the value of an

otherwise equivalent unlevered firm.

Iv. In a world with taxes, the cost of equity capital of a levered firm is greater than

the cost of equity capital of an otherwise equivalent unlevered firm.

I, II, and III, but not Iv

II and Iv. but not I or III

I and III, but not II or Iv

II, III, and Iv, but not I