Which of the following propositions concerning the second paper published by Modigliani & Miller in 1963 (MM II) are true?

(i) Corporate taxes do not influence a firms cost of capital.

(ii) In a world with corporate taxes, firm value increases as the amount of debt in the capital structure decreases.

(iii) Given an amount of debt in a levered firms capital structure, a higher marginal corporate tax rate decreases the firms value.

(iv) Bondholders receive any value of the tax shield created by higher leverage.

Group of answer choices

Only (ii) and (iii) are true.

None are true.

Only (i) and (iv) are true.

Only (iv) is true.

Only (i) is true.