Which of the following statements accurately describe features of Modigliani and Miller's proposition 2 (in the absence of taxes) None of the other statements accurately describe features of Modigliani and Miller's proposition 2 (in the absence of taxes). It suggests that a firm's cost of equity will be unaffected by any change in leverage. More than one of the other statements accurately describe features of Modigliani and Miller's proposition 2 (in the absence of taxes). It suggests that shareholders will increase their required return as leverage increases and that this increase is in response to the increased risk that shareholders now face. It suggests that as leverage increases, the firm's cost of equity capital will decline to reflect the fact that shareholders are sharing business risk with debt holders