Which of the following statements is correct?

A-Under the assumptions of the MM model with corporate taxes, a firm's value increases linearly for every dollar of debt

B- firms whose assets are illiquid and thus would be sold at "fire sale" prices should be encouraged to increase their use of debt financing

C- firms whose earnings are more volatile, all else equal, face a greater chance of bankruptcy and should therefore use less equity than more stable firms

D- bankruptcy-related costs refer to the actual costs that would be incurred if the financial distress goes occur. Therefore, the probability of financial distress is not considered as part of the bankruptcy-related costs in general.

E- in the trade-off theory, firms trade off the benefits of debt financing (favorable corporate tax treatment) against cost of equity financing.