The following situations are descriptive of Integrity Corporation. Which would be considered as the most favorable for the common stockholders.

a. Equity ratio is high; return on assets exceeds the cost of borrowing.

b. Book value per share of common stock is substantially higher than market value per share; return on common stockholders' equity is less than the rate of interest paid to creditors.

c. Equity ratio is low; return on assets exceeds the cost of borrowing.

d. Integrity stops paying dividends on its cumulative preferred stock; the price-earnings ratio of common stock is low.