Company A has a debt to total assets ratio of 60% and a times interest earned ratio of 3. Their current liabilities are $50,000 and they have a long-term loan of $100,000 outstanding at 5%. They are subject to a 25% income tax rate. Their pre-tax income for the year is $10,000. If the interest rate on the loan decreased to 4% next year, and everything else was constant, the companys solvency, based on their times interest earned ratio, would be

a) Better

b) Worse

c) Unchanged

and why?