Which of the following is/are false regarding capital structure theory as stated by Miller and Modigliani?1) If agency costs are considered, the expected agency costs increases as the debt-equity ratio decreases.2) With the given assumptions, there is no optimal capital structure.3) In the presence of taxes, the market value of the firm decreases by the tax shield of debt

• A. nly 1st statement
• B. nly 2nd statement
• C. oth 1st and 3rd statements
• D. ll the three statements.