Suppose there are no taxes. firm abc has no debt and firm xyz has debt of $5,000 on which it pays interest of 10% each year. both companies have identical projects that generate free cash flows of $800 or $1,000 each year. after paying any interest on debt, both companies use all remaining free cash flows to pay dividends each year. Suppose you hold 10% of the equity of xyz. if you borrow at 10%, what is an alternative strategy that would provide the same cash flows?

a. Buy 10% of XYZ debt and 10% of ABC

b. Buy 10% of XYZ debt and10% of XYZ equity

c. Buy 10% of ABC and 10% of XYZ equity

d. Borrow $500, buy 10% of ABC