3. An increase in the market risk premium has which of the following effects? OA) No effect on the WACC O B) A decrease in the WACC o C) An increase in the WACC OD) An increase in the cost of debt OE) A decrease in the cost of debt An increase in flotation costs is likely to have which of the following effects? A) An increase in the market risk premium B) A decrease in the market risk premium C) No effect on the WACC D) A decrease in the WACC E) An increase in the WACC