Which of the following is a true statement regarding a company's use of debt and its impact on the cost of debt, the cost of equity capital, and the weighted-average cost of capital?

Group of answer choices

The cost of equity capital increases as the debt-to-total capital ratio rises because the required return on common equity should increase with the higher risk.

The cost of debt declines as the debt-to-total capital ratio increases because the credit ratings on the bond improve as the debt-to-total capital ratio increases.

Beta for a stock is constant at all levels of debt-to-equity.

All statements are correct