Assume no taxes or other frictions. ABC is a firm with a steadily growing free cash flow. In particular, the free cash flow next year $($year $1)$ is expected to be $$300$ million, and subsequent growth is expected to be $3\%$ a year perpetually. The free cash flow is all paid out.

The risk free rate is $2\%.$ The WACC is $5\%.$

Further, ABC has issued a debt to buy back part of its equity. The new debt takes the form of a bond, paying $$60$ million per year forever. The new debt is risk$-$free, given ABC$$s future cash flows and therefore, the return on debt would be the same as risk$-$free rate i$.$e$.2\%.$

Next year $($year $1),$ after the payout to its equity and debt holders, what is ABC$$s debt to equity ratio?