Your firm is considering issuing one-year debt, and has come up with the following estimates of the value of the interest tax shield and the probability of distress for different levels of debt: B. Suppose the firm has a beta of zero, so that the appropriate discount rate for financial distress costs is the risk-free rate al 5%. Which level of debt above is optimal if, in the event of distress, the firm will have distress costs equal to a. $2 million b. $5 milion? c. $25 million? a. $2 million? if distress costs are equal to $2 million, the optimal level of debt is $ milion. (Round to the nearest integer.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Debt Level (in $ million) D 40 50 60 70 PV (interest tax shield, $ million) 0.00 0.76 0.95 1 14 1.33 Probability of Financial Distress 0% 05 133 2% 79% 80 1.52 16% 90 1.71 31% Print Done