Bettinger Brothers Inc. has always paid out all of its earnings as dividends, and hence has no retained earnings. The same is expected in the future. The company uses the CAPM to calculate its cost of equity. Its target capital structure consists of common stock, preferred stock, and debt. Which of the following events would decrease the WACC?

Question $14$Select one:

a$.$

The market risk premium declines.

b$.$

The flotation costs associated with issuing new common stock increases.

c$.$

The company's beta increases.

d$.$

Expected inflation increases.

e$.$

The flotation costs associated with issuing preferred stock increases.