1. *The management of Tarantulagoodies is considering a reduction in the corporation's debr ratio. The following information is available: Debt Common Stock $10,000,000, kd-7.5%, tax-rate-30% $23.000.000. I-1.2, RF-5%, E(Ru)-12%. The issuance of $5,000,000 in common equity and repurchase of debt in that same amount is expected to result in the reduction in kd to7%. The reduction in the debt ratio is expected to result in -1 . Should the management purs ue this reduction in debt? Why/why not