Marley's is an unlevered firm with a stock price of $50. The firm projects earnings before interest and taxes of $100,000 in perpetuity. The firm is considering THREE alternatives: (1) issuing $300,000 of bonds with an attached interest rate of 6 percent to repurchase shares. (2) issuing $550,000 of bonds with an attached interest rate of 8 percent to repurchase shares. (3) buying back $150,000 of the firms equity with cash on hand. Assume a 20 percent tax rate and 10,000 shares outstanding. If Marley announces the repurchase,

Provide a recommendation as to which alternative you would support. Use numbers to justify your choice.