Question: Based on M&M Proposition 2 with taxes, the weighted average cost of capital: A. is equal to the aftertax cost of debt. B. has a

Based on M&M Proposition 2 with taxes, the weighted average cost of capital:

A. is equal to the aftertax cost of debt.

B. has a linear relationship with the cost of equity capital.

C.is unaffected by the tax rate.

D. decreases as the debt-equity ratio increases.

Answer is B but I want to know the reasons :)

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