Toasty Feet makes fur-lined boots for winter wear. The firm has a beta of 1.08 and just paid an annual dividend of $1.50 per share. Based on the security market line approach, which one of the following will increase the firm's cost of equity? Assume a constant market rate of return.

Select one:

a. A decrease in the firm's beta

b. A decrease in the stock price

c. A decrease in the dividend payout ratio

d. A decrease in the risk-free rate of return

e. A decrease in the firm's rate of growth