Assume that Williams Corp is financed with a heavy reliance on short-term debt and short-term rates have increased. How do these facts impact the interest expense, net income, and financial risk for Williams Corp?

Interest expense

Net income

Financial risk

a.

Decreases

Decreases

Decreases

b.

Increases

Decreases

Increase

c.

Decrease

Increases

Increases

d.

Increases

Decreases

Decreases