Which of the following statements is correct?

Question 9 options:

	The WACC can change depending on the amount of funds a firm raises during a given year. Moreover, the WACC at each level of funds raised is a weighted average of the marginal costs of each capital component, with the weights based on the firms target capital structure.
	The WACC is calculated using a before-tax cost for debt equal to the interest rate that must be paid on new debt, along with the after-tax costs for common stock and for preferred stock if it is used.
	The bond-yield-plus-risk-premium approach to estimating the cost of common equity involves adding a risk premium to the interest rate on the companys own long-term bonds. The size of the risk premium for bonds with different ratings is published daily in The Wall Street Journal.
	An increase in the risk-free rate is likely to reduce the marginal costs of both debt and equity.