The current information for firm ABC is as follows: Market value of debt: 3000 million Number of shares issued: 100 million Current stock price: $60 per share Current Beta: 1.5 Current WACC: 16% The expected annual growth rate of the firm is 4%. Marginal tax rate: 40% The firm is considering a major change in its capital structure. You are CFO of ABC and now you have three options: Option A: Issue $1000 million in new stock and repurchase 1/3 of its outstanding debt. The firm's credit rating will be AAA in this case, and the associated interest rate will be 10%. Option B: Issue $2000 million in new debt to buy back stock. The firm's credit rating will become A- with an associated interest rate of 12%. Option C: Issue $3000 million in new debt to buy back stock. The firm's credit rating will be CCC and the associated interest rate is 16%. Note 1: The current interest on T-Bill is 7.5% and the interest on T-Bonds is 8%. Note 2: Return on the market portfolio is 16.5% Q1. d) What role (if any) would the variability in the firm's income play in your decision of whether or not to issue additional debts? And why? The current information for firm ABC is as follows: Market value of debt: 3000 million Number of shares issued: 100 million Current stock price: $60 per share Current Beta: 1.5 Current WACC: 16% The expected annual growth rate of the firm is 4%. Marginal tax rate: 40% The firm is considering a major change in its capital structure. You are CFO of ABC and now you have three options: Option A: Issue $1000 million in new stock and repurchase 1/3 of its outstanding debt. The firm's credit rating will be AAA in this case, and the associated interest rate will be 10%. Option B: Issue $2000 million in new debt to buy back stock. The firm's credit rating will become A- with an associated interest rate of 12%. Option C: Issue $3000 million in new debt to buy back stock. The firm's credit rating will be CCC and the associated interest rate is 16%. Note 1: The current interest on T-Bill is 7.5% and the interest on T-Bonds is 8%. Note 2: Return on the market portfolio is 16.5% Q1. d) What role (if any) would the variability in the firm's income play in your decision of whether or not to issue additional debts? And why