According to M&M's Proposition Two, what impact does financial leverage have on a firm's cost of equity and its weighted average cost of capital?\ (Select the best choice below.)\ A. As the amount of debt in the capital structure increases, the firm's cost of equity decreases while its WACC stays the same.\ B. As the amount of debt in the capital structure increases, the firm's cost of equity increases but its WACC decreases.\ C. As the amount of debt in the capital structure increases, the firm's cost of equity increases while its WACC stays the same.\ D. As the amount of debt in the capital structure increases, the firm's cost of equity increases and so does its WACC.

According to M\&M's Proposition Two, what impact does financial leverage have on a firm's cost of equity and its weighted average cost of capital? (Select the best choice below.) A. As the amount of debt in the capital structure increases, the firm's cost of equity decreases while its WACC stays the same. B. As the amount of debt in the capital structure increases, the firm's cost of equity increases but its WACC decreases. C. As the amount of debt in the capital structure increases, the firm's cost of equity increases while its WACC stays the same. D. As the amount of debt in the capital structure increases, the firm's cost of equity increases and so does its WACC