Which of the following statements about the cost of capital is INCORRECT? Select one: a. WACC should be calculated based on the market value instead of the book value. b. The reason we must assign a cost of capital to retained earnings involves the opportunity cost principle. c. Weighted average cost of capital calculations should be focused on the after-tax costs. d. WACC should be calculated based on the marginal costs instead of the historical costs. e. A company's target capital structure does not affect its weighted average cost of capital. Which of the following statements about the cost of capital is CORRECT? Select one: a. Both the cost of debt and equity financing will decrease when a firm increases its debt/asset ratio. b. Both the cost of debt and equity financing will increase when a nuclear plant company encounters a ban on nuclear power generation in certain states. c. The WACC of a firm will decrease when investors become more risk averse. d. Both the cost of debt and equity financing will decrease when a firm expands into a risky new area. e. Both the cost of debt and equity financing will decrease when the Federal Reserve tightens credit