The Cost of Equity for a Company with a Debt-Equity

Multiple Choice

The cost of equity for a company with a debt-equity ratio of .41:

A) tends to remain static even as the company's level of risk increases.
B) increases as the unsystematic risk of the company's stock increases.
C) is affected by either a change in the company's beta or its projected rate of growth.
D) equals the risk-free rate plus the market risk premium.
E) equals the company's pretax weighted average cost of capital.