Which of the following statement is true according to traditional approach of capital structure?

• A. Cost of capital increases with the use of debt after a certain amount of debt and later falls
• B. Cost of equity and debt more or less remains constant with the use of debt up to a certain amount of debt
• C. Cost of declines and cost of debt remains constant with increase in debt.
• D. Cost of equity declines and cost of debt increases with increase in debt