Explain Why you agree or disagree with the following statements. The answer should not be more th...

Explain Why you agree or disagree with the following statements. The answer should not be more than 3 sentences. Be specific in your answer and write only the most relevant explanations (Total Marks 6, Each 2).

1. A firm should select the capital structure that is fully levered (2 Marks)
2. Leveraged beta represents fundamental operating risk. (2 Marks)
3. MM Proposition I with no tax supports the argument that a firm should borrow money to the point where the tax benefit from debt is equal to the cost of the increased probability of financial distress (2 Marks)