The management of Starbucks has had a target capital structure of 20/80 debt-to-equity (based on market values), but is contemplating moving toward a higher debt/equity ratio as the company finances its high rate of growth. Under M&M theory with taxes, what would happen to its WACC and the various components of WACC as it shifted to the higher debt ratio? (Circle the right answer)

Cost of Equity	Up	Down	No Change
Interest rate on debt	Up	Down	No Change
Debt/(Debt + Equity)	Up	Down	No Change
WACC	Up	Down	No Change