Which of the following statements is CORRECT?

a. Since debt financing is cheaper than equity financing, raising a company's debt ratio will always reduce its WACC.

b. Since debt financing raises the firm's financial risk, increasing a company's debt ratio will always increase its WACC.

c. Increasing a company's debt ratio will typically reduce the marginal cost of both debt and equity financing. However, this action still may raise the company's WACC.

d. Increasing a company's debt ratio will typically increase the marginal cost of both debt and equity financing. However, this action still may lower the company's WACC.

e. Since a firm's beta coefficient it not affected by its use of financial leverage, leverage does not affect the cost of equity.