PLEASE EXPLAIN YOUR ANSWER

Which of the following statements is CORRECT?

PICK ONE ANSWER

A - Flotation costs associated with issuing new common stock normally increase the WACC.

B - An increase in the risk-free rate will normally lower the marginal costs of both debt and equity financing.

C - If all of a firm's additional capital funds required during the current year will be raised using debt, the appropriate marginal cost of capital for use in capital budgeting during the current year is the after-tax cost of debt.

D - A change in a company's capital structure cannot affect its WACC.