Larger Works in MPL

[W. Yip]

I have been reading the MPL and I have one question.

Qu: After combining covered code with my own code to form a 'larger work',
do I have discretion as to what license I distribute this larger work
under? (I am aware I have to be in compliance with the terms governing
distribution of executable versions [1], which mainly have some criteria to
be satisfied for covered code only.)

It seems to me that after I create a 'larger work', I can redistribute this
larger work  either:

(i) under a *single* license of my choice and on my own terms, but however
such terms must comply with those criteria regarding covered code; or

(ii) under two licenses. One is the MPL for the covered code portions and
another is a license of my choice and on my own terms which comply with
those criteria regarding covered code.

Which is correct?

[1] s.3.6 MPL

Quote" You may distribute the Executable Version of the Covered Code or
ownership rights under a license of your choice, which may contain terms
different from this license, provided that you are in complaince with the
terms of this license and that the license for the executable version does
not attempt to limit or alter the recipients rights in the source code
version from the rights set forth in this license. If you distribute the
executable version under a different license you must make it absolutely
clear that any terms which differ from this license are offered by you
alone, not by the initial developer or any contributor."

where

"executable" is defined in s. 1.5 MPL as "covered code in any form other
than  source code". For present purposes, I have understood  an
"executable" version of covered code to be contained in the 'larger work'.