XYZ Corporation has total capital of $8,000,000 and forecasts next year's EBIT to be $600,000. The firm can borrow at 10% and wants to maintain a minimum TIE ratio of 3. Using the operating income method, what is maximum debt-to-capital ratio XYZ Corporation can carry and still meet its TIE ratio of 3 times?

Please write out the answer in a step by step format. do not do in excel!

A. 25 percent

B. 40 percent

C. 50 percent

D. 75 percent

E. 30 percent