32.A company would like to borrow certain amount of money. Present value of the tax shield (per M&M proposition) is expected to be = $286,000. Four years from now, there is 50% probability of bankruptcy the cost of the bankruptcy is expected to be $882,000. If the discount rate for the company is 12 percent, then:

a.They should not borrow, as the cost of financial distress is greater than tax shield

b.They should borrow, it will increase firm value

c.To answer, need to know the amount of debt

d.To answer, need to know the interest rate

E. none of the above