1. Givenbelowistheinterestcoverageratioforeachcreditslabandthecorresponding spread over the risk-free rate. The risk-free rate is 5% for largemanufacturing firms.InterestCr.SpreadCoverageRating(RiskRatiofreerate -5%)> 8.50AAA0.20%6.50 - 8.50AA0.50%5.50 - 6.50A+0.80%4.25 - 5.50A1.00%3.00 - 4.25A-1.25%2.50 - 3.00BBB1.50%2.00 - 2.50BB2.00%1.75 - 2.00B+2.50%1.50 - 1.75B3.25%1.25 - 1.50B -4.25%0.80 - 1.25CCC5.00%0.65 - 0.80CC6.00%0.20 - 0.65C7.50%< 0.20D10.00%Your firm's market value is Rs 50,000. Currently, the firm does not have anydebt. Current EBITDA is Rs. 5,000 and depreciation is Rs. 2000. The firmplans to buy back half of its shares (pro-rata - at market value) by issuing debtworth Rs. 25,000. What will be the credit rating of the debt issue? If B isconsidered as a risky rating, as a stock investor what would your advice thisfirm about its strategy to buy back. If the buyback has to be implemented, whatproportion of the shares would you advise should be bought back