Proposition 3: Discount rate for investments is independent of how the funds are financed. It considers how factors of taxes, agency costs, and costs of finance distress affected by company's capital structure.
　　Generally, proposition 3 is the upgrade of both proposition1 and proposition2. Debt-Equity ratio increases in line with the increase on required return, and the risk. The magnitude of the above increasing should be equal, otherwise, arbitrage opportunity may exsit.

beta与debt-equit应该没有correlation吧.怎么这里写到的D-E增长伴随着RR&risk的增长?
风险应该是用beta来测得吧.那么不就说明D-E应该和BETA有关系?