The RQP corporation is looking to reduce their cost of capital. In calculating the return on equity for the firm, the firm uses CAPM. Which of the following events would reduce the firm's weighted average cost of capital?

Select one:

a. The firm decides to issue a large amount of debt to take advantage of the cheaper cost of debt versus equity.

b. The firm sees a dramatic increase in beta.

c. Inflation rates increase

d. The market risk premium decreases.

e. None of the above conditions will cause the firm's weighted average cost of capital to decrease