If Interest on Corporate Debt Is Tax Deductible, a Firm's

If interest on corporate debt is tax deductible, a firm's return on equity increases because:

A) after-tax income increases with the presence of debt.
B) generally, the presence of debt reduces the amount of equity to a greater effect than the reduction in after-tax.
C) debt reduces equity and increases after-tax income.
D) the presence of debt to lead to increases in dividends.