Which of the following statements about the corporate cost of capital is most correct?

A	Because the use of debt financing increases a businesss financial risk, increasing the debt ratio will always increase the corporate cost of capital.

B	Because debt financing is less costly than equity financing, increasing the debt ratio will always reduce the corporate cost of capital.

C	Increasing the debt ratio typically will reduce the marginal cost of both debt and equity; however, it still may increase the corporate cost of capital.

D	Statements a. and c. are correct.

E	None of the above statements is correct.