You have been hired as a management consultant by AD Corporation to evaluate whether it has an appropriate amount of debt (the company is worried about a leveraged buyout). You have collected the following information on AD's current position: There are 100,000 shares outstanding at $20 per share. The stock has a beta of 1.15. The company has $500,000 in long-term debt out-standing and is currently rated BBB. The current market interest rate is 10% on BBB bonds and 6% on Treasury bonds. The company's marginal tax rate is 40%. You proceed to collect the data on what increasing debt will do to the company's ratings