How would each of the following scenarios affect a firms cost of debt after tax, r_d(1 - T); its cost of equity, r_s; and its Weighted Average Cost of Capital (WACC)? Indicate with a plus (+), a minus (-), or a zero (0) whether the factor would raise, lower, or have no or an indeterminate effect on the item in question. (Assume for each answer that other things are held constant.)

r_d(1 - T) r_s WACC

a. The corporate tax rate is lowered. _____ _____ _____

b. Investors become more risk-averse. _____ _____ _____

c. Interest rates decline. _____ _____ _____