Ben Rhodes, a board member who is a former state congressman says that Cloud Co. should increase its debt level above its current 40% level to upwards of 60% as interest rates are really low and interest can be written off. Which is most correct?

a. Higher debt levels will increase operating leverage, which will lower the DTL

b. Increasing debt should cause financial risk to rise and raise the cost of debt

c. Increasing debt should increase the DFL which will raise the DTL all else equal

d. Interest is not tax deductible so his statement is incorrect to begin with

e. Both b & c