Which of the following statements about the cost of capital is correct? Select one: a. WACC should be calculated based on the marginal costs instead of the historical costs. b. Weighted average cost of capital calculations should be focused on the before-tax costs. c. A company's target capital structure does not affect its weighted average cost of capital. d. WACC should be calculated based on the book value instead of the market value. e. The cost of retained earnings should be zero because there is no direct cost associated with capital raised as retained earnings. Which of the following statements about the cost of capital is INCORRECT? Select one: O a. 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. b. The WACC of a firm will increase when investors become more risk averse. c. Both the cost of debt and equity financing will increase when the Federal Reserve tightens credit. d. Both the cost of debt and equity financing will increase when a firm increases its debt/asset ratio. e. Both the cost of debt and equity financing will decrease when a firm expands into a risky new area. 0