Which of the following statements about the cost of capital is INCORRECT ?

Select one:

a.Both the cost of debt and equity financing will increase when the Federal Reserve tightens credit.

b.Both the cost of debt and equity financing will increase when a company merges with another firm whose earnings are counter-cyclical both to those of the first firm and those to the stock market.

c.Both the cost of debt and equity financing will increase when a firm increases its debt/asset ratio.

d.The WACC of a firm will increase when investors become more risk averse.

e.If a company's tax rate increases, then, all else equal, its weighted average cost of capital will decrease.