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