A firm increases the proportion of equity in its capital structure by issuing shares to repay a bank loan. Which statement is the most correct? O a. The required return on equity will increase. O b. Shareholders will be better off due to amplified profits. O c. Ignoring tax, a shareholder who requires higher leverage can personally lend excess cash in the market to achieve the same benefits O d. The costs and probability of financial distress will be higher for the firm. O e. The before-tax weighted average cost of capital (WACC) will not change. A firm increases the proportion of equity in its capital structure by issuing shares to repay a bank loan. Which statement is the most correct? O a. The required return on equity will increase. O b. Shareholders will be better off due to amplified profits. O c. Ignoring tax, a shareholder who requires higher leverage can personally lend excess cash in the market to achieve the same benefits O d. The costs and probability of financial distress will be higher for the firm. O e. The before-tax weighted average cost of capital (WACC) will not change