All Else Equal, Which of the Following Statements Is True

All else equal, which of the following statements is true from a tax standpoint, given current U.S. tax laws?

A) Although a firm is able to deduct both interest expense and dividend distributions in determining taxable income, investors prefer to receive dividend income since it is taxed at
A lower rate.
B) Corporate tax liability is decreased with the use of debt, but interest income is not tax-advantaged to the investors.
C) The use of debt can result in lower taxes for the corporation, and interest income is taxed at preferred rates at the investor level.
D) The tax-preferred financing method is the use of retained earnings since a firm does not pay any taxes on reinvested earnings, and capital gains are not taxed at the investor level
Until they are realized.