Schalhem Sisters inc. has always paid out all of its earnings as dividends, hence the firm has no retained earnins. This same situation is expected to persist in the future. The company uses the CAPM to calculate its costs of equity, its target capital structure consists of common stock, preferred stock and debt. Which of the following events would INCREASE its WACC?

a. the market risk premium declines

b. the floatation costs associated with issuing preferred stock decrease

c. the company's beta decreases

d. the floatation costs associated with issuing new common stock increases