An increase in a firm's debt ratio can cause

I. a decline in the firm's P/E ratio because of increased costs and increased risk.

II. an increase in the firm's beta as risk rises.

III. a decline in the firm's weighted average cost of capital, up to a point.

IV. an increase in the cost of equity eventually if leverage gets too high.

a. All are affects

b. None are affects

c. Only I, II and III.

d. Only IV

e. Only I and IV.