A firm is analyzing two possible capital structures30 and 50 percent debt ratios. The firm has total assets of $5,000,000 and common stock valued at $50 per share. The firm has a marginal tax rate of 40 percent on ordinary income. Assuming the total assets remain constant, the number of common shares outstanding for each of the capital structures would be:

(a) 30 percent debt ratio: 30,000 shares and 50 percent debt ratio: 50,000 shares

(b) 30 percent debt ratio: 50,000 shares and 50 percent debt ratio: 70,000 shares

(c) 30 percent debt ratio: 70,000 shares and 50 percent debt ratio: 100,000 shares

(d) 30 percent debt ratio: 70,000 shares and 50 percent debt ratio: 50,000 shares