Corporation A decides to borrow $1,000,000 and use the money to buy back $1,000,000 of its common stock. The corporation pays 6% interest on its borrowed funds which exactly equals the amount of the dividend it used to pay on the common stock it repurchased. Therefore, Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a Corporation A's operating income will decrease due to higher interest expense. b Corporation A's retained earnings will increase due to the tax deductibility of interest expense. c Corporation A will have no change in its operating income since the interest expense exactly offsets the prior dividend payment. d Corporation A's gross profit will decrease