If a firm increases its percentage of debt in its capital structure, what will happen to the firm's WACC, everything else being equal?

• AThe WACC will fall because of the tax advantage of debt that equity lacks.
• BThe WACC will fall, because the firm is using more debt, and the cost of debt is less than the cost of equity.
• CThe WACC will increase, because debt is riskier than equity.
• DYou can't determine the effect on the WACC without more information.