You have run a series of regressions of firm value changes at Motorola, the semiconductor company, against changes in a number of macroeconomic vari- ables. The results are summarized here:

Change in Firm Value = 0.05 3.87(Change in Long Term Interest Rate)

Change in Firm Value = 0.02 + 5.76(Change in Real GNP)

Change in Firm Value = 0.04 2.59(Inflation Rate) Change in Firm Value = 0.05 3.40($DM)

a. Based on these regressions, how would you design Motorolas financing?

b. Motorola, similar to all semiconductor companies, is sensitive to the health of high-technology com- panies. Is there any special feature you can add to the debt to reflect this dependence?