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 decrease when a firm expands into a risky new area.

c. The WACC of a firm will decrease when investors become more risk averse.

d. If a companys tax rate increases, then, all else equal, its weighted average cost of capital will decrease.

e. Both the cost of debt and equity financing will decrease when a nuclear plant company encounters a ban on nuclear power generation in certain states.