Given the following projected WACC values below, if a firm is currently carrying 50% debt the firm should:

0% debt = 7.8% WACC

10% debt = 7.5% WACC

20% debt = 7.4% WACC

30% debt = 7.3% WACC

40% debt = 7.4% WACC

50% debt = 7.6% WACC

60% debt = 8% WACC

70% debt = 8.6% WACC

80% debt = 10% WACC

a. decrease their debt level to lower the cost of potential distress

b. decrease their debt level to increase their tax savings

c. increase their debt level to increase their tax savings

d. increase their debt level to lower the cost of potential distress