In 2012, Intel Corporation had a market capitalization of $121 billion, debt of $72 billion, cash of $14.7 billion and EBIT of nearly $18 billion If Intel were to increase its debt by $1 billion and use the cash for a share repurchase, which market imperfections would be most relevant for understanding the consequence for Intel's value? Why? (Choose the best answer below) O A Intel's debt is a tiny fraction of its total value. Indeed, Intel has more cash than debt, so its net debt is negative. Intel is also very profitable; at an interest rate of 6%, interest on Intel's debt is only $432 million per year, which is less than 2.5% of its EBIT OB. The risk that Intel will default on its debt is extremely small. This risk will remain extremely smal even if intel borrows an additional $1 billion. Thus, adding debt will not really change the likelihood of financial distress for Intel (which is nearly zero) and thus will also not lead to agency conflicts OC. The most important financial friction for such a debt increase is the tax savings Intel would receive from the interest tax shield. A secondary issue may be the signaling impact of the transaction-borrowing to do a share repurchase is usually interpreted as a positive signal that management may view the shares to be underpriced OD. All of the above