Which of the following statements regarding existing theories of capital structure is false? o Modigliani and Miller's Proposition with taxes does not hold in practice because it ignores bankruptcy costs and agency costs According to the pie model, the optimal capital structure maximizes the value of marketable claims and minimizes the value of nonmarketable claims Debt signaling theory relies on the assumption that investors will view an increase in debt as a negative sign for the firm's future value O Static trade-off theory argues that capital structure is optimal when the present value of financial distress costs equals the present value of the tax shield on debt Assuming the interest on debt is fully tax deductible, the issuance of bonds will increase both the present value of the tax shield on debt and the present value of financial distress costs