A company's total assets are expected to increase by 5% this year solely funded by bonds. Assume no change in the number of stocks, a positive ROS of 1.5% and despite the efforts of distributing all earnings as dividends, there will be no impact in the stock value. What is the expected value of the leverage ratio?

a. increases 3.5%

b. decreases by 1.5% because the profits increases equity

c. will not change

d. 1.05 times prior leverage