Question 2 M&M Proposition I with taxes is based on the concept that: o A A firm's WACC is unaffected by a change in the firm's capital structure. o B. The optimal capital structure is the one that is totally financed with equity. o The cost of equity increases as the debt-equity ratio of a firm increases. o The value of a firm increases as the firm's debt increases because of the interest tax shield. The capital structure of a firm does not matter because investors can use homemade leverage