Which of the following statements about WACC is most correct?

Select one:

The weighted average cost of capital is likely to remain unchanged even if the total funds required are in excess of what can be generated from retained earnings

The cost of retained earning is generally higher that the cost of issuing new common shares because it includes opportunity cost

A general increase in interest rates is likely to increase the marginal costs of both debt and equity financing

Weighted average cost of capital calculations should be based on before-tax costs.