Which one of the following is a correct statement regarding a firm's weighted average cost of capital (WACC)?

• A. An increase in the market risk premium will tend to decrease a firm's WACC.
• B. A reduction in the risk level of a firm will tend to increase the firm's WACC.
• C. A 5 percent increase in a firm's debt-equity ratio will tend to increase the firm's WACC.
• D. The WACC can be used as the required return for all new projects with similar risk to that of the existing firm.