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Which of the following is consistent with MM Proposition I with taxes? A. The optimal capital structure is the one that is totally financed with

Which of the following is consistent with MM Proposition I with taxes?

A. The optimal capital structure is the one that is totally financed with equity

B. The capital structure of the firm does not matter because investors can use homemade leverage

C. The value of firm increases as total debt increases because of the interest tax shield

D. The cost of equity decreases as the debt-equity ratio of a firm increases

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