Which of the following is false regarding a firm's cost of capital?

A: It is used to calculate the NPV on a firm's projects.

B: It considers the proportion of each component in a firm's capital structure.

C: It should be lower than the investor's required rate of return.

D: It is measured using current market values.

Why should stock market investors ignore diversifiable risks when calculating the required rates of return?

A: Diversifiable risk cannot be accurately quantified.

B: Beta includes a component to compensate for the diversifiable risk.

C: Diversifiable risk can be eliminated.

D: The market risk premium compensates investors for diversifiable risk.