You have acquired a stake in a company with very little debt and are pushing the company to borrow more money. What effect will borrowing more money have on the company's costs of capital?

It will decrease the cost of equity, the cost of debt and the cost of capital.

It will increase the cost of equity and increase the cost of debt but will have no effect on the cost of capital

It will decrease the cost of equity and increase the cost of debt but will decrease the cost of capital.

It will increase the cost of equity, the cost of debt and the cost of capital.

It will decrease the cost of equity and increase the cost of debt but may decrease the cost of capital.

It will increase the cost of equity and increase the cost of debt but may decrease the cost of capital.