Firms A and B are identical in all respects except that firm a is more highly levered than firm B. Consider each firm's Income Statement and choose the best answer from the following:

a. Firm A's Net Income is higher than Firm B's

b. Firm A and Firm B have the same Net Income

c. Firm B's Net Income is higher than Firm A's

d. Firm A's tax expense is lower than Firm B's

e. Firm B's tax expense is lower than Firm A's

f. both c and d are correct