Assume that the risk-free rate remains constant, but that the market risk premium declines. Which of the following is likely to occur?

A. The required return on a stock with a beta equal to 1.0 will remain the same.

B. The required return on a stock with a beta less than 1.0 will decline.

C. The required return on a stock with a beta greater than 1.0 will increase.

D. Statements b and c are correct.

E. All of the statements above are correct.