Remco Limited has $5 billion in debt outstanding (carrying an interest rate of 9%), and 10 million shares trading at $50 per share. Based upon its current EBIT of $ 200 million, its optimal debt ratio is only 30%. The firm has a beta of 1.20, and the current treasury bond rate is 7%. Assuming that the operating income will increase 10% per year for the next five years and that the firm's depreciation and capital expenditures both amount to $100 million annually for each of the five years, estimate the debt ratio for Remco if: a. it maintains its existing policy of paying $50 million a year in dividends for the next 5 years. b. it eliminates dividends.