Which of the following statements are correct in relation to M&M Proposition II with no taxes?

I. The firm's business risk is equal to the weighted average cost of capital.

II. Financial risk is determined by the debt-equity ratio.

III. Financial risk determines the firm's return on assets.

IV. The cost of equity declines when the amount of equity used by a firm rises.

A.I, II, and III only

B.II and IV only

C.I, II, and IV only

D.II, III and IV only

E.I and IV only