Which of the following contentions concerning the static trade off theory of capital structure are true?

(i) The optimal capital structure depends solely on the costs of financial distress.

(ii) Costs of financial distress decrease as the amount of debt in the capital structure increases.

(iii) The value of the tax shield decreases as the amount of debt in the capital structure decreases.

(iv) The cost of financial distress depends upon the nature of the firms assets.

Group of answer choices

Only (iii) is true.

Only (i), (iii) and (iv) are true.

Only (ii) and (iii) are true.

Only (iv) is true.

Only (iii) and (iv) are true.