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

a) As the firm raises more and more capital, market efficiency would indicate that the firms marginal weighted-average cost of capital should fall.

b) If the firm needs more funding than can be supported by retained earnings, the firms weighted-average cost of capital (WACC. will increase.

c) Assuming constant risk, the firms marginal WACC is the correct discount rate to use in making capital budgeting decisions.

d) If a firm earns exactly the marginal cost of capital on its new investment projects, it will satisfy the return requirements of its creditors and equity investors.