Question: MM Proposition I with taxes states that: there is a positive relationship between leverage and firm value. the value of a firm is inversely related

MM Proposition I with taxes states that:

there is a positive relationship between leverage and firm value.

the value of a firm is inversely related to the amount of leverage used by the firm.

the value of an unlevered firm is equal to the value of a levered firm plus the value of the interest tax shield.

a firm's cost of capital is the same regardless of the mix of debt and equity used by the firm. a firm's weighted average cost of capital increases as the debt-equity ratio of the firm rises.

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